Interconnections between Macroeconomic Indicators and the Indian Stock Market: A Decade-Long Analysis (2013-2023)

The performance of its stock markets reflects the financial and economic performance of any nation. The trends in stock price movements are significantly affected by different economic factors. Researchers have identified various economic variables that significantly impact the stock market performance of the Indian economy. This study attempts to explore the impact of different economic variables on the Indian stock market from the year 2013 to 2023. Factors (namely crude oil prices, exchange rate, foreign institutional investment, gold prices, index of industrial production, and wholesale price index) have been taken into consideration. Overall, the findings revealed mixed outcomes. Some variables had strong interconnections, while some had only weak interconnections with BSE Sensex. It implies that macroeconomic indicators remarkably influence the performance of the Indian stock market. However, not all the macroeconomic indicators impose similar influences. Different stakeholders like researchers, academicians, investors, and policymakers may gain beneficial insights from the study’s findings.