Volume 20 No 22 (2022)
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An Empirical Study on Implications and Impact of GDP on the Indian Stock Market
Dr. Puneet Saxena
Abstract
The gross domestic product is one of the key macroeconomic elements that significantly impact the movement of stock market indices. The persistent shifts that have taken place in the Indian stock market and GDP throughout the preceding decade have served as the impetus for several empirical studies. This paper aims to investigate the relationship between the Gross Domestic Product (GDP) and the stock market, as well as the impact that the GDP has on the stock market. The study is carried out with the assistance of two variables: an independent variable (GDP) and a dependent variable (stock market). Statistical methods like Karl Pearson’s Correlation and the Simple Linear Regression Analysis are used to test the hypothesis. The result for the Correlation between GDP and the SENSEX is 0.909, and the Correlation between GDP and the NIFTY 50 is 0.913; both of these results indicate a significant positive relationship between the two variables. The study’s findings indicate a significant relationship between India’s GDP and the stock market. The regression findings have also shown that the GDP does, in fact, impact the stock market in India. These data show that any movement in the Indian stock market is reflected in the country’s gross domestic product (GDP).
Keywords
Gross Domestic Product, GDP, Stock market, Sensex, Nifty 50, Correlation, Regression, Bombay Stock Exchange (BSE), National Stock Exchange (NSE
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