Macro Economic Variables Affecting Share Prices Volatility in India: A Study With Reference to NSE, India
- July 8, 2018
- Posted by: RSIS
- Category: Management
International Journal of Research and Innovation in Social Science (IJRISS) | Volume II, Issue VI, June 2018 | ISSN 2454-6186
Ganavi K K
Assistant Professor, Alva’s College Center for PG studies, Moodbidri, Karnataka, India
Abstract- The current study investigates the variation of share price on three prominent macro-economic variables viz., GDP, Inflation rate and Interest rate in NSE, India from April 2013 to March 2018 (Financial Year) via monthly data of nifty 50 companies. The study involves a descriptive survey method and data collected was evaluated by means of the software statistical package for social sciences (SPSS version 22) and Microsoft excel. The study accomplishes that share price volatility of NSE depends on GDP, inflation rate and interest rate. The three prominent independent (economical) variables studied elucidate nearly 97.9% be governed by share price volatility characterized by R2. This also means remnant 2.1% depends on the others factors also. The regression analysis signifies all predicator variable factors; share price volatility will be 15583.346. Keeping all the independent variables at zero, a unit rise in GDP causes a moderate rise of 0.367 in share price volatility; a unit enhancement in inflation rate causes a 0.992 rise in share price volatility; a unit increase in interest rate significantly leads to 0.088 upsurges in share price volatility among firms listed at the National stock exchange (NSE), India.
Key words: National stock exchange, GDP, Interest rate, Inflation rate, regression model
I. INTRODUCTION
In this modern era stock exchange plays a dynamic role in mobilizing long term funds and trading of shares. These stock exchanges are responsible for investment, capital establishment and also act as the health indicator of stock exchange of the Indian economy. After economic liberalisation stock market found to have a considerable growth in the volume of the trade which manifest of progress in the stock market. A well performing stock exchange plays a helpful in economic activity through growth and saving, efficient allocation of investment and attracting foreign direct investment.
