An Empirical Study on Impact Analysis of Macro Economic Indicators on Indian Banking Stocks | Chapter 3 | Economics, Business and Management: Recent Advances Vol. 1

 

The fluctuations in stock prices are due to both company-specific internal factors and many external factors. Among the external factors, the most important are the macroeconomic factors. To create a profitable portfolio, investors must analyse both internal and external influences. This study focuses on the impact of the most important macroeconomic factors, viz., GDP, inflation, industrial production, crude oil prices, foreign institutional investments, currency exchange rate and interest rates, on the prices of the listed banking stocks in India. The sample constitutes the top five listed banks selected from the public and private sectors on the basis of their market capitalisation. The collected secondary data was analysed using suitable statistical tools such as mean, standard deviation, coefficient of correlation and linear multiple regression analysis. Hypotheses are tested based on Pearson’s correlation and regression analysis. It is observed that only two variables, i.e. industrial production and exchange rate, have a significant positive impact on the stock prices. The variable interest rate is showing a significantly negative influence on the stock prices. All the other variables, viz., GDP, inflation, oil prices and FII investments have an insignificant impact.

 

 

Author(s) Details

S. Sundara Ram
C. U. Shah University, Wadhwan, Gujarat, India.

 

Munjal Dave
C. U. Shah University, Wadhwan, Gujarat, India.

 

M. Rajesh
VIT Business School, VIT University, Tamil Nadu, India.

 

 

Please see the book here :- https://doi.org/10.9734/bpi/ebmra/v1/6975