"THE IMPACT OF MACROECONOMIC VARIABLES ON STOCK PRICES”

Abstract

The aim of the research paper is to examine the relationship between the macroeconomics variable and stock price. Karachi Stock Exchange (KSE) in the context of Pakistan. In this study the researcher took three macroeconomics variable that includes (consumer price index .crude oil prices and foreign exchange rate) these data is on monthly basis .from (Jan 2007-Dec 2011).A multiple regression model is applied to test the relationship between KSE-100 index return and three macroeconomics variable. The final test concludes that consumer price index has no significant relationship on KSE-100 index return. Whereas the crude oil price and foreign exchange rate have a significant effect on KSE-100 index return.