Impact of Money Supply and Inflation on Stocks of Nifty 50 Listed Companies: An Analysis of Granger Causality

Objective of the study is to analyse the impact of some macroeconomic variables on the functioning of stock market. Financial market plays a very important role in the development and the growth of the economy. The Indian economy is affected by various macro and microeconomic variables. Recently Demonetization and the new indirect tax system like GST brought a lot of changes in the economy and it is also effecting the functioning of the stock market. Various analysis have shown as a results by applying some financial and econometrical models. In this study annual data taken of all the variables. The study used Augmented Dickey Fuller (ADF) for unit root test, multiple regression for testing significance and Granger causality test to check the cause and effects among the variables. The study found that both of the macroeconomic variables have a significant relationship with Nifty 50 listed stocks.