IMPACT OF MACROECONOMIC VARIABLES ON STOCK MARKET INDEX

Abstract

Purpose: To examine the relationship exists between macroeconomic variables and stock market index and to study the impact of macroeconomic variables on KSE100 index. Methodology/sample: Most of our research work relies on secondary data as it is explanatory research. Monthly data of last 10.5 years is used in this research. Analysis is made using SPSS by conducting Multiple Linear Regression Test. Data was collected using secondary but reliable sources. Findings: Results reveal that there exists a relationship between Macroeconomic Variables and Stock Market Index. Interest Rate is significantly and negatively related to Stock Market Index. GDP per Capita PPP is significantly and positively related to Stock Market Index. General CPI is insignificantly and negatively related to Stock Market Index. Practical Implications: This research has significant implications for many stakeholders like Investors, Government, Brokers, Bankers etc. as the research is related to capital markets and economy.