The impact of macroeconomic variables towards the performance of Indian stock market (BSE SENSEX)

This study examines the relationship between various macroeconomic variables and the performance of the Indian Stock Market (BSE SENSEX). Macroeconomic variables, which influence overall economic conditions, price levels, and international activities, are known to affect the stock market, a vital component for industry expansion and economic growth. While past research acknowledges that both macroeconomic and non-macroeconomic factors affect stock market changes in developing and emerging countries, this study addresses the lack of specific research focusing on India. The macroeconomic proxies used are: COP (Crude Oil Price), ER (Exchange Rate), GDP (Gross Domestic Product), INF (Inflation), IR (Interest Rate), and M2 (Money Supply). The data will be tested using E-Views Software. The research found that among these variables, only Inflation (INF) has a positive relationship with the Indian Stock Market return (BSE SENSEX).