INFLUENCE OF MACROECONOMIC FACTORS ON INDIAN STOCK MARKET PERFORMANCE: AN EMPIRICAL ANALYSIS

Abstract

This paper investigates the influence of macroeconomic factors on the performance of the NIFTY 50, India’s benchmark stock market index, utilizing a novel approach that integrates both primary and secondary data. The study analyzes nine years of monthly macroeconomic data using logistic regression to examine their impact on the NIFTY 50's monthly performance. Secondary data analysis reveals that fluctuations in the Dow Jones Index and exchange rates are significant determinants of NIFTY 50 movements. To validate these findings, qualitative insights were gathered through face-to-face interviews with stock market experts, who highlighted additional factors such as political stability, economic conditions in developed nations, and India’s bilateral relations as crucial elements in predicting market trends. This research is pioneering in the Indian context, offering a comprehensive analysis by combining domestic and international macroeconomic variables to forecast NIFTY 50 performance, providing valuable insights for policymakers, investors, and financial analysts.