Effect of Macroeconomic Variables on Stock Market: A Conceptual Study

Indian stock market has undergone incredible transforms since 1991, when the government has adopted liberalization and globalization policies. As a result, there is an increasing importance of the stock market from collective economy point of view. When we talk about economy then stock market has become a key driver of current market and is one of the major sources of raising resources for Indian company, thus enabling financial and economic growth. In fact, in the world, Indian stock market is one of the emerging markets. The aim of this paper is to examine effect of macroeconomic variables on stock market. because wealth of the any economy is indicated by macroeconomic variables and they decide the future of investments. In any economy price determination process is influenced by the macroeconomic variables. The improbability of macroeconomic variables influences stock and commodity market significantly causing volatility in the prices. Stock Market is an important segment of the financial system of our country as it plays a vital role in channelizing savings from deficit sector to surplus sector.