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Abstract
The Financial Market plays a crucial role in making up a well-functioning financial system. It is made up of several sub-components, the Capital Market being one of them. The growth in the financial market stimulates growth in the financial system which in turn induces growth in the economy.
The economy of India has observed strong economic growth. For the Financial Year (FY) 2022-23, India’s GDP growth accelerated to 7.2% amid global uncertainties. It aided India to become the fifth-largest economy in the first quarter of FY 2022-23 leaving the United Kingdom behind, after withstanding repeated waves of COVID-19 pandemic shock. India has also recorded all-time high foreign exchange reserves of USD 645 billion in October 2021. The Indian Stock Market Index (BSE SENSEX) hit an all-time high and rallied to 62,245 points in October 2022 as well. Can this be described as a simple coincidence? These events motivated us to study whether the long run movement of Indian Stock Market Indices is due to the effect of select macroeconomic variables namely the Gross Domestic Product (GDP) at Constant Prices and Gross Domestic Product (GDP) at Current Prices. The study is conducted from the period 1995 to 2022, which incorporated BSE SENSEX and NSE NIFTY50 as the dependent variables to appear for the Indian Stock market and Gross Domestic Product (GDP) both at Constant Prices and at Current Prices as independent variables. The study applied simple linear regression analysis to report the findings of our research.
References
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