FACTOR AFFECTING THE STOCK MARKET IN PAKISTAN

Abstract

This research paper highlights that how factors are affecting the stock market of Karachi Stock Exchange. There are number of factors that are affecting the Karachi stock exchange but I am taking very few of them like Inflation rates, Interest rates, gold price and exchange rate. All the variable which I considered are most important macroeconomic variables that effects the economy of any country. I have been taken semiannual data of ten years from 2002 June to 2012 December. I applied multiple linear regression method which showed the strong relationship among the dependent and independent variables. All variables have significant impact on the stock market. Analysis shows that inflation is the strongest negative determinant of stock market while exchange rate has not such strong relation with stock marketln graph the trend is shown of all independent and dependent variable that how much all variables are affecting and fluctuating with stock market.