The Impact of Inflation, Interest Rates and GDP On Stock Prices-A Comparative Analysis

THE IMPACT OF INFLATION, INTEREST RATES AND GDP ON
STOCK PRICES-A COMPARATIVE ANALYSIS
Submitted by
VISHWAS R
USN: 1GA21BA107
Submitted to
GLOBAL ACADEMY OF TECHNOLOGY (AUTONOMOUS),
BENGALURU
Affiliated to
Visvesvaraya Technological University, Belagavi
In partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
Under the guidance of

DR. S. GOKULA KRISHNAN
Associate Professor
Department of Management studies and Research Centre
GLOBAL ACADEMY OF TECHNOLOGY

Rajarajeshwari Nagar, Bengaluru- 560098
Batch: 2021-2023
DECLARATION
I, VISHWAS R (USN 1GA21BA107), hereby declare that this Project report entitled “The
Impact of Inflation, Interest rates and GDP on Stock prices- A comparative Analysis” is
the original work carried out by me under the guidance of Dr. S. Gokula Krishnan, Associate
Professor of Department of Management Studies and Research Centre, Global Academy of
Technology, Bengaluru. I also declare that this project report is submitted in partial fulfilment
of the requirements for the award of the degree of Master of Business Administration under
Visvesvaraya Technological University, Belagavi.
Further, I declare that this report is an independent work and has not been submitted to any
degree/ diploma from any other University/Institution.
Date:
Place: Bengaluru Signature of the student
ACKNOWLEDGEMENT
The sense of accomplishment comes with completing a mission. It would be incomplete if it

weren’t for the people who it is possible by providing continuous support and motivation. They
acted as beacon of light and crowned our efforts with success.
I consider it is as my privilege to express through this report a few words of profound gratitude
and deep regards to all those who guided me in completing this project work.
I would like to express my gratitude to our Principal, Dr RANA PRATHAP REDDY, Global
Academy of Technology, Bengaluru for his valuable suggestions and moral support throughout
the course.
I honestly thank Dr. N VENKATESH KUMAR, Head of the department, Department of

Management studies and research centre, Global academy of technology, Bengaluru for their
continuous support during the entire project.
I sincerely thank Dr. S. GOKULA KRISHNAN, Associate professor, Department of

Management studies and research centre, Global academy of technology for supporting and
guiding me as an internal guide.
Last but not least, it is my privilege to express my gratitude to my parents for their assistance
in completing the project.
This was a great learning opportunity for me and I’m highly indebted to all the above people
for giving me this opportunity.
Name: VISHWAS R
USN: 1GA21BA107
TABLE OF CONTENTS
CONTENTS PAGE
NO
Executive summary
Chapter 1 Introduction
1.1 Introduction of the study 1
1.2 Theoretical framework
Chapter 2 Literature Review 3
Chapter 3 Research Methodology
3.1 Research approach 10
3.2 Research design
3.3 Statement of Problem
3.4 Need for the study 12
3.5 Objectives of the study 13
3.6 Hypothesis of the study
3.7 Limitations of the study 14
Chapter 4 Data Analysis and Interpretation
4.1 Agriculture sector analysis
4.1.1 Descriptive statistics 15
4.1.2 Correlation analysis 16
4.1.3 Regression analysis 18
4.1.4 Granger Causality analysis 20
4.2 Automobile sector analysis
4.3 Infrastructure Industry
4.4 Information Technology sector
4.5 Pharmaceuticals Industry
Chapter 5 Findings, Suggestions and Conclusion
5.1 Findings 45
5.2 Suggestions 47
5.3 Conclusion
References 48
Annexure 50
LIST OF TABLES
TABLE NO. PARTICULARS PAGE NO.
3.6.1 Sampling distribution 10
4.1.1.1 Descriptives for Agri sector 15
4.1.2.1 Correlation matrix 16
4.1.3.1 Linear regression 18
4.1.4.1 Causality matrix 20
4.2.1.1 Descriptives for Auto sector 21
4.3.1.1 Descriptives for Infrastructure Industry 27
4.4.1.1 Descriptives for IT Industry 33
4.5.1.1 Descriptives for Pharma Industry 39
LIST OF GRAPHS
GRAPH NO. PARTICULARS PAGE NO.
4.1.2.1 Correlation Heatmap of Agri industry 16
4.2.2.1 Correlation Heatmap of Auto industry 22
4.3.2.1 Correlation Heatmap of Infrastructure industry 28
4.4.2.1 Correlation Heatmap of IT industry 34
4.5.2.1 Correlation Heatmap of Pharma industry 40

EXECUTIVE SUMMARY
This study aims to analyse the relationship between macroeconomic variables and the stock
prices of companies in selected industries. The study focuses on identifying the major
macroeconomic variables that influence stock prices, examining the relationship between these
variables and stock prices, and quantifying the impact of these variables on stock prices. The
study also provides recommendations for investors, stakeholders, and policy makers based on
the results of the study.
The study found that macroeconomic variables, such as interest rates, inflation, and gross
domestic product (GDP), have a significant impact on the stock prices of companies in selected
industries. The direction and strength of the relationship between these variables and stock
prices varied between industries, with some industries being more sensitive to changes in
macroeconomic variables than others. The study also found that the impact of macroeconomic
variables on the stock prices of individual companies within the selected industries varied, with
some companies being more affected by these variables than others.
Based on the results of the study, it is recommended that investors, stakeholders, and policy
makers consider the impact of macroeconomic variables when making investment and policy
decisions. The study provides valuable insights into the relationship between macroeconomic
variables and stock prices in selected industries and can inform the development of effective
economic policies.
In conclusion, this study highlights the importance of macroeconomic variables in determining

the performance of companies and their stock prices and provides a basis for further research
in this area.
Keywords: Inflation, Interest rates, GDP rates, Share prices, Investors.

Chapter 1: INTRODUCTION
1.1. Introduction of the Study
The stock market is a complex system that is influenced by various factors, including
macroeconomic variables such as interest rates, inflation, and gross domestic product (GDP).
These variables have a significant impact on the performance of companies and can directly
affect their stock prices. Despite the importance of macroeconomic variables in determining
the performance of companies and their stock prices, there is a limited understanding of the
specific relationship between these variables and stock prices in different industries.
The project aims to identify the major macroeconomic variables that influence stock prices,
examine the relationship between these variables and stock prices, and quantify the impact of
these variables on stock prices. The project also provides recommendations for investors,
stakeholders, and policy makers based on the results of the study.
The selected industries for this project are chosen based on their importance in the economy
and their representation of different sectors.
The results of this project will provide valuable insights into the impact of macroeconomic
variables on the stock prices of companies in selected industries. This information will be
useful for investors, stakeholders, and policy makers who are interested in understanding the
factors that influence the stock market.
1.2. Theoretical Framework
The study conducted for the purpose of providing the basic information regarding the stock
market volatility which are caused by the macro-economic indicators. In developing country
like India, people want to invest with high profits and very negligible risk.
The Indian stock market changed after economic liberalization, when businesses gave the
impression that people wanted to buy their portions (Pramath Nath Acharya & Rudra Prasanna
Mahapatra, 2018).
No investors will only invest in the one share, they always want to invest in the portfolio of
various companies shares to diversify and reduce the risk aspects of the shares. So it is very
Page 1 of 52
helpful to the investors as we have considering the 5 different industries companies which may
help the investors in diversifying the risk.
The fluctuations in the stock market are influenced by some internal factors as well as the
external factors. The main elements that might have an effect on the stock markets are
macroeconomic indicators like GDP, interest rates, and inflation.
The study states that the stock market is highly volatile in nature. The share prices of the
companies will also be changing time to time. The investors should have the knowledge of the
changes caused by these macroeconomic indicators to purchase or sell the shares.
Most of the investors only consider the company’s internal factor for the changes in the share
prices but the external factors also impacts the share prices of the companies.
As stated earlier that India is the country where there is majority of middle-class investors
where their investments in the shares should get them the better returns. So, these middle-class
investors will get to know the impact of the external factor impacts the prices.
As a result, the goal is to contrast the impact of the above-mentioned Macroeconomic indicators
on the share prices of Selected company.
Investors would discover through this analysis the changes and helps them to decide wisely.
Page 2 of 52
Chapter 2: LITERATURE REVIEW
Upadhyaya 2017, The author used a variety of methodologies, including the granger
causality test and the ARDL model, to examine secondary data from the NSE indices CNX
nifty to evaluate how long-run cointegration of inflation, interest rates, and GDP affected
the stock market. Using the aforementioned tests, the study concluded that interest rates,
GDP, and inflation have no effect on stock values. As a result, there is no long-term
relationship between GDP and stock market prices. The Granger Causality Test and the
ARDL were the study's only methodologies for investigating the causative relationship and
long-term cointegration, respectively. Most significantly, other hypotheses outside the
scope of the study may be considered for future investigation.
Singh, 2015, The stock market's connection to macroeconomic variables has been a major
source of concern in the current economic climate. The study's goal was to see how
macroeconomic indicators and the Indian stock market altered during the examination. To
first and foremost ascertain the relationship between key macroeconomic variables and their
impact on the Indian stock market. to look into the causal relationship between
macroeconomic variables and the stock market. The instruments used to investigate the
"long-term equilibrium link between stock market and macroeconomic factors" include
correlation and multivariate stepwise regression. According to the report, stock prices are
affected because economic variables fluctuate more frequently on a daily basis.
KV, 2019, Taking a global perspective on the effects of explicit macroeconomic indicators
on the development of the securities market, with cash supply, trade rates, loan fees,
expansion, and exchange transparency as free variables and the development of the
securities market as the dependent variable. This study will aid us in determining the impact
of selected domestic and international macroeconomic indicators on the movement of the
stock market in a selected group of countries by using statistics that describe and cross
correlate the connection between the global stock markets of various nations and
macroeconomic indicators.
Keswani, 2019, An In-Depth Examination of the Impact of Macroeconomic Variables on

the Indian Stock Market. The study's independent and dependent variables were
macroeconomic system indicators and the stock market index. The fundamental goal is to
comprehend the link between the government and Important elements include India's
policies, disposable income, interest rates, exchange rates, and stock returns. Second,
Page 3 of 52
impartial To ascertain which variable has the most significant impact on the Indian financial
exchange's prediction of offer costs. The investigation analysed monthly data spanning ten
years, from 2006 to 2016. The author used the descriptive analysis, the normality test, and
the multicollinearity test. The author has established that the first step in this study is an
empirical evaluation of the macroeconomic factors that influence the growth of stock
market.
Kumar, 2019, An Empirical Study of the Indian Stock Market and Macroeconomic
Variables. For this objective, the author employed macroeconomic indicators as the
explanatory variable and stock market performance as the response variable. The major
purpose is to forecast how the Indian stock market will change using particular
macroeconomic data. The author used descriptive statistics on panel hostility and correlation
between panels. This paper's authors demonstrated how changes in macroeconomic
conditions affect the stock market.
Islam & Habib 2016, According to the author, stock returns are affected by macroeconomic
factors. The goal is to discover whether macroeconomic factors influence the stock market.
If they are, how much more so? Regression with many variables and the Granger causality
test are the methods used for analysis. The study has substantial ramifications for regulators,
scholars, legislators, and the investment community as a whole, according to the paper.
Despite the fact that the majority of macroeconomic variable regression coefficients were
found to be insignificant when investigating how they affect the performance of the Indian
stock market, the direction of their impact is consistent with economic theory..
Acharya & Mahapatra 2018, a study on selected industries in India, the study's hypothesis
is that share prices of specific enterprises are influenced by macroeconomic variables. The
review's broad goal is to discern and quantify the impact of certain macroeconomic
components on the value share costs in the Indian stock market. The author has made use of
For the current study, regression and correlation are used to determine the relationship as
well as the effect of macroeconomic factors on the share price of selected industries. The
author has also used graphical representation to demonstrate the impact of macroeconomic
variables on the share prices of the Indian stock market..
A.K & Pooja 2017, An empirical examination of the impact of macroeconomic factors on
Indian stock prices. According to the author, macroeconomic conditions influence share
prices. The data for this study contains annual data from 1979 to 2014. The goal of this study
Page 4 of 52
is to evaluate the long run and short run link between stock price and a set of macroeconomic
factors for the Indian economy. An effort has been made in this paper to evaluate whether
basic macroeconomic variables affect the stock price in India or not using an auto-regression
model. "VECM (correlation) analysis" for all estimation variables.
De sousa, noriller, huppes, Vaz lopes & Meurer, 2018, Relationship between
macroeconomic factors and money-returning companies and the protected zone from Latin
American stock Independent: Stock market returns are influenced by macroeconomic data.
The purpose of this article is to test the relationship between macroeconomic variables and
stock returns (SR) in public corporations in Latin America's finance and insurance sectors.
For the analysis, the author employed descriptive analysis and the unit root test. The findings
of this paper supported the international studies.
Nur Alam, 2020, According to his paper, the macroeconomic characteristics of five South
Asian nations influence stock market performance. The goal is to understand how these
variables affect stock market results. To accomplish this, regression analysis and model
descriptive analysis of granger causality were applied. The association between these
characteristics and stock market returns was discovered to be both favourable and negative
in this study. The real interest rate, inflation, the FDI-to-GDP ratio, and the exchange rate
all have a negative impact on the stock market return, but the GDP growth rate, the foreign
currency reserve growth rate, and the budget deficit all have a positive impact.
Abdallah & Abualjarayesh, 2017The stock market's performance is influenced by

macroeconomic factors. The study's goal is to look into how interest rates, exchange rates,
and inflation effect the stock returns of ASE. The study's tools included ANOVA,
correlation, and multivariate regression analysis. Interest rates, inflation, and currency rates
were evaluated in relation to ASE stock returns in this study. The ASE free float index's
stock returns are unrelated to the currency rate. Furthermore, the findings demonstrate that
interest rates and stock returns are inversely connected, whereas inflation is positively
correlated with stock returns. As a result, while evaluating the values of common stocks,
investors should consider macroeconomic trends.
Kotha & Sahu, 2016, This research intends to examine the long and short run relationships
between selected macroeconomic indicators and financial exchange returns in India. "This
article explored the relationship between the Indian stock market and selected
macroeconomic variables by conducting the appropriate analysis that addressed both long-
Page 5 of 52
run and short-run relationships." Monthly data from July 2001 to July 2015, in particular,
are submitted to Johansen's co-integration analysis and granger causality tests. The findings
are noteworthy and valuable for determining how various macroeconomic conditions
influence stock performance. According to the findings, there is one cointegrating vector
between the Sensex and the following macroeconomic indicators: WPI, depository bill rate,
cash supply, and swapping scale.
Hersugondo, Laksana, & Rudy, 2017, This research intends to examine the long and short
run relationships between selected macroeconomic indicators and financial exchange
returns in India. "This article explored the relationship between the Indian stock market and
selected macroeconomic variables by conducting the appropriate analysis that addressed
both long-run and short-run relationships." Monthly data from July 2001 to July 2015, in
particular, are submitted to Johansen's co-integration analysis and granger causality tests.
The findings are noteworthy and valuable for determining how various macroeconomic
conditions influence stock performance. According to the findings, there is one
cointegrating between the Sensex and the following macroeconomic indicators: WPI,
depository bill rate, cash supply, and swapping scale.
Olokoyo, Oyakhilome, Ibhagui & Babajide, 2020, In their research, they found that
Nigeria's stock market performance is influenced by macroeconomic factors. The goal is to
explore the long-term effects of macroeconomic indicators such as interest rates, foreign
capital flows, exchange rates, GDP growth, inflation, and trade on Nigeria's stock market
performance (market capitalization). The authors conducted the analysis using descriptive
statistics on co-integration and discovered that the empirical findings support the long-term
cointegration of macroeconomic variables with stock market performance. According to the
author's estimation, market capitalization is adversely connected with interest rates,
inflation, trade and exchange rates, GDP growth rate, and foreign capital flows.
Pal & Garg, 2019, The authors used Indian stock indexes as the outcome variable and
macroeconomic indicators as the explanatory variable in their analysis. They employed the
VAR model to determine whether the outcome variable is dependent on the Explanatory
variable. The purpose of this article is to investigate two issues: the sensitivity of the
simultaneous impact of monetary and macroeconomic surprises in the Indian stock market,
and the heterogeneity of stock responses to monetary policy and macroeconomic surprises,
as defined by industry type and firm size.
Page 6 of 52
Singh, 2019, The author conducted the analysis using the BSE Sensex as the explained
variable and the Macroeconomic indicators as the explanatory variable. The goal is to look
into the relationship between the Indian stock market and the macroeconomic variables of
industrial production. They employed the Co integration test and the Granger causality test
to examine the variables' connections. The Indian stock market index, the BSE Sensex, was
found to have a substantial long-run association with three of the five macroeconomic
variables studied in the study. The relationship between the stock market index and the
interest rate is bidirectional, according to the Granger causality studies based on VECM.
Kalam, 2020, Malaysian stock market performance are influenced by macroeconomic

factors. The primary focus of this study was on the influence of macroeconomic variables
on stock market returns. Multicollinearity regression analysis with unit root test are the tools
or tests utilised for the analysis. According to the hypothesis, the macroeconomic variables
GDP, IR, INF, ER, and foreign direct investment have a considerable influence on the return
on the Malaysian stock market (FDI).
Misra, 2018, Malaysian stock market performance are influenced by macroeconomic
factors. The primary focus of this study was on the influence of macroeconomic variables
on stock market returns. Multicollinearity regression analysis with unit root test are the tools
or tests utilised for the analysis. According to the hypothesis, the macroeconomic variables
GDP, IR, INF, ER, and foreign direct investment have a considerable influence on the return
on the Malaysian stock market (FDI).
John, 2019, For the purposes of the study, the author chose stock market prices as the
explained variable and macroeconomic variables as the explanatory variable. The study's
primary goal is to examine how interest rates and money control affect the Nigerian stock
market. The author considered the statistics that describe the Normality test, regression
using least squares, and the Causality test for the analysis. The research examines how
macroeconomic issues influence the Nigerian stock market.
Alam, 2017, Macroeconomic conditions have an impact on stock prices. The goal is to
explore the impact of economic conditions on the performance of stock market returns. The
author employed descriptive statistics to determine whether or not the influence was created.
According to the research, frequent changes in macroeconomic circumstances have a major
impact on stock values.
Badullahewage, 2018, The author used Sri Lankan stock market results as a biassed variable
and macroeconomic data as an unbiased variable. The purpose of this article is to investigate
Page 7 of 52
the impact of macroeconomic factors on the Sri Lankan stock market. Regression and
descriptive statistics are the tools used in the analysis. The analytical results revealed that
there is a substantial relationship between macroeconomic conditions and the stock market.
If there's an increasing trend in components like interest rate, exchange rate, and GDP, it
tends to guide to a stronger performance of the stock market.
Assagaf, Murwaningsari, Gunawan & Mayangsari, 2019, The authors considered the
Indonesian stock market to be the dependent variable and macroeconomic factors to be the
independent variables. The goal of this research is to look at how macroeconomic variables
affect changes in the composite stock price index, which is a proxy for overall return on
business shares. For the aim of the analysis, descriptive analysis, correlation,
multicollinearity, and normality tests are overseen. This study discovered that stock returns
and macroeconomic variables such as interest rates, inflation rates, money supply, and
currency rates had a substantial impact on Indonesia Stock Exchange firms.
Megaravalli & Sampagnaro, 2018, The authors used stock markets in India, China, and
Japan as dependent variables and macroeconomic factors as independent variables. The goal
of this article is to investigate the relationship between India's, China's, and Japan's stock
markets, as well as major macroeconomic factors such as exchange rates and inflation in the
three nations. The authors used a variety of methods, including the unit root test,
multicollinearity, and Granger causality test. According to pooled estimated data from three
ASIAN countries, the exchange rate has a positive and considerable long-term effect on
stock markets, whereas inflation has a negative and small long-term effect. In the short run,
there is no statistically meaningful relationship between stock markets and macroeconomic
indicators.
Gopinathan & Durai, 2019, The authors used Indian stock market indexes as dependent
variables and macroeconomic fundamentals as independent variables. The goal of this
article is to investigate the long-run and short-run relationships between Indian stock
markets and major macroeconomic factors such as exchange rates and inflation. For the
analysis, the authors employed Johansen's Cointegration test and the Unit root test. This
study attempted to understand the time-varying, nonlinear links between stock prices and
other key macroeconomic factors using monthly data from India from April 1994 to July
2018.
Page 8 of 52
Pervaiz, & Jian-Zhou, 2018 The authors used Karachi stock market results as the dependent
variable and macroeconomic fundamentals as the independent variable. The study's goal is
to determine the empirical results of the ties between stock returns and macroeconomic
variables such as inflation, interest rate, and exchange rate, as well as to investigate whether
there is any relationship between stock returns and macroeconomic variables in the context
of the Karachi Stock Exchange. For the analysis, the authors employed descriptive statistics
and the Regression test. As a result, economic variables have an impact on the Karachi Stock
Exchange.
Page 9 of 52
Chapter 3: RESEARCH METHODOLOGY
3.1. Research Approach
This study employs empirical research because it is based on observing and measuring
the cause-and-effect relationship between the variables. The methodology involved is the
secondary data is collected regarding the share prices of the top 3 performing companies in
the sector and averaged it and then data regarding economic factors rates collected and
conducted the analysis namely descriptives, correlation, regression and the causality to get
the results of how the economic indicators impacting the changes in the share prices.
3.2. Research design
The descriptive research design is used in this study or the analysis to comprehend the
effects of the macroeconomic variables on the share prices of the selected companies. The
purpose of the descriptive design is to describe the situation of how the independent
variable, economic indicators, is describing or influencing the share prices of the chosen
companies.
3.2.1. Sampling framework and Data Collection
The study is carried out using the share prices of the different companies under various
industries.
Table 3.6.1
Industry Type No of Name of the companies

Companies
Agriculture 3 UPL Limited
PI industries
Bayer’s crop science
Automobile 3 Maruti Suzuki
Bajaj Auto LTD
Eicher Motors
Information technology 3 TCS
Infosys
Page 10 of 52
HCL technologies
Infrastructure 3 ABB India Ltd

Siemens India
L&T
Pharmaceuticals 3 Dr. Reddy laboratories
Sun pharma
Divis laboratories
TOTAL 15
3.2.2. Statistical design
The statistical tools and techniques used for the study are as follows:
1. Descriptive Statistics: To comprehend a population's characteristics, such as its mean,

and standard deviation, by analysing the descriptive statistics of a dataset, to find trends
and patterns such as changes over time or relationships between Share prices of various
companies and the macroeconomic variables.
2. Correlation analysis: To locate connections between two variables, like whether
Macroeconomic indicators and Share price of various companies are linked.
To comprehend the significance of relationships of the explanatory variable and the
explained variable.
3. Regression analysis: To determine the most critical variables, the variables with the
greatest influence on the dependent variable that is the share prices of the various
companies can be identified with the help of regression analysis.
Y = α + β1X1 + β2X2 + β3X3
Where,
α is intercept value
β1, β2, and β3 are the coefficients
X1, X2, X3 are the independent variables.
4. Granger Causality test: The Granger causality test is frequently utilized to identify
changes in causal relationships between Share prices and the Macroeconomic factors.
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The test performed to see whether changes in the macroeconomic indicators have a
direct impact on the stock prices.
Y(t) = b0 + b1 Y(t-1) X(t-1) + e (t)
Where:
Y(t) represents the dependent time series at time t, while X(t-1) represents the
independent time series at time t-1.
The constant term is b0, and the regression coefficients are b1 and b2.
The error term is e(t).
3.2.3. Data collection
The Data collected for the analysis is the secondary data.
1. The share prices of the Companies of various industries are collected from the BSE
(Bombay stock exchange) website https://www.bseindia.com/ from April 2015 to
December 2022.
2. The Inflation rates are collected from https://www.rateinflation.com/ website from
April 2015 to December 2022.
3. The Interest rates of India are collected from https://in.investing.com/ from April 2015
to December 2022
4. The GDP rates are collected form https://www.kaggle.com/ from the year 2015 to 2022.
3.3. Statement of Problem
The investors want their investment to be safe and get them the better yield. They want to know
the movement of share prices in the market. If only considering the internal factors only will
not provide the better returns for the investors. Any changes in the macroeconomic indicators
may be or may not be affecting the prices.
So, the dilemma for the investors to diversify their portfolio and maintain a secured investment
option. This study will assist to understand the impulsiveness of the share prices.
3.4. Need for the study
The stock market is a complicated system driven by a variety of factors, including

macroeconomic variables such as interest rates, inflation, and GDP (GDP). These
characteristics have a big influence on company success and can directly affect stock prices.
Page 12 of 52
Despite the importance of macroeconomic variables in affecting company performance and
stock prices, there is a lack of knowledge of the precise link between these variables and stock
prices in many industries. Because of this lack of awareness, investors and stakeholders are
unable to make educated judgements about investing in these firms.
The findings of this study might give useful information on the influence of macroeconomic
variables on the stock prices of firms in certain industries. This data may be valuable for
investors, stakeholders, and policymakers interested in learning about the variables that impact
the stock market.
3.5. Objective of the study

1. To ascertain the impact of macroeconomic variables on the share prices of diverse
companies of a variety of industries.
2. To provide better information for the investors and stakeholders when making
investment decision.
3.6. Hypothesis Formulation

1. H0: There is no significant impact of inflation on the share prices of the selected
companies under various industries.
H1: There is a significant impact of inflation on the share prices of the selected
2. H0: There is no significant impact of interest rates on the share prices of the selected
H1: There is a significant impact of interest rates on the share prices of the selected
3. H0: There is no significant impact of GDP on the share prices of the selected

H1: There is a significant impact of GDP on the share prices of the selected companies
under various industries.
Page 13 of 52
3.7. Limitations of the Study
1. The study only confined to the share price changes of the companies from 5 different
industries.
2. Only 5 industries are taken into consideration, namely Agri, Automobiles,
Infrastructure, IT sector and the pharmaceutical industry.
3. The companies taken are the Top performing companies from each of the selected
industries.
4. The collected only form 1st April 2015 to 31st December 2022.
5. The independent variables, the macroeconomic indicators considers are Inflation rates,
interest rates and GDP only.
Page 14 of 52
Chapter 4: DATA ANALYSIS AND INTERPRETATION
The analysis will be conducted sector wise.
4.1. AGRICULTURE SECTOR
4.1.1. Descriptive analysis
Table 4.1.1.1 Descriptive Statistics
SHARE INFLATION INTEREST GDP

PRICE RATES RATES RATES
N 93 93 93 93
Mean 2189 0.0491 0.0556 0.0515
Standard
507 0.0153 0.0109 0.0479
deviation
Shapiro-Wilk p < .001 0.179 < .001 < .001
Source: Retrieved from JAMOVI and Authors own calculations.
The means of inflation rates, interest rates and the GDP rates are close to each other.
The standard deviation values for the independent variables 0.0153, 0.0109, 0.0479 which are
very high, stating that there is a significant more amount of variation in the data.
The Shapiro-Wilk test is a statistical test used to determine if a sample of data is normally
distributed. The p-values for the Shapiro-Wilk test for share price, interest rates, and GDP rates
are all less than 0.001, indicating that the data is normally distributed at a significance level of
0.005. The p-value for the Shapiro-Wilk test for inflation rates is 0.179, indicating that the data
for inflation rates is not normally distributed at level of 0.005.
Page 15 of 52
4.1.2. Correlation matrix
Table 4.1.2.1 Correlation Matrix
SHARE INFLATION INTEREST

GDP RATES
PRICE RATES RATES
SHARE Pearson's
—
PRICE r
p-value —
INFLATION Pearson's
0.474 *** —
RATES r
p-value < .001 —
INTEREST Pearson's
-0.770 *** -0.485 *** —
RATES r
p-value < .001 < .001 —
Pearson's
GDP RATES -0.112 -0.345 *** 0.405 *** —
r
p-value 0.286 < .001 < .001 —
Note. * p < .05, ** p < .01, *** p < .001
Correlation Heatmap
Fig 4.1.2.1 Correlation Heatmap
Page 16 of 52
There is a weak positive correlation (0.474) between share price and inflation rates, with a p-
value of < .001. This means that as inflation rates increase, share price tends to increase, and
when inflation rate decreases the share prices also decreases. Therefore, the HO is rejected,
hence there is a significant relationship between the inflation rates and share prices of
Agriculture industries.
There is a strong negative correlation (-0.770) between share price and interest rates, with a p-
value of < .001. This means that as interest rates increase, share price tends to decrease, and
vice versa. Therefore, the HO is rejected, hence there is a significant relationship between the
interest rates and share prices of Agriculture industries.
There is a weak negative correlation (-0.112) between share price and GDP rates, with a p-
value of 0.286. This means that there is no significant relationship between share price and
GDP rates. Therefore, the HO is accepted, hence there is no significant relationship between
the GDP rates and share prices of Agriculture industries.
Page 17 of 52
4.1.3. Regression analysis
Table 4.1.3.1 Model fit measures

Overall Model Test
Model R R² F df1 df2 p
1 0.986 0.972 13.1 67 25 < .001
Table 4.1.3.2 Omnibus ANOVA Test

Sum of Squares df Mean Square F p
INFLATION RATES 1460000.00 48 30469 1.17 0.344

INTEREST RATES 633698 12 52808 2.02 0.066
GDP RATES 1310000.00 7 186702 7.15 < .001
Residuals 652436 25 26097
Note. Type 3 sum of squares
Table 4.1.3.3 Model Coefficients - SHARE PRICE

Predictor Estimate SE t p
Intercept ᵃ 2384.07 256 9.3166 < .001

ᵃ Represents reference level
Table 4.1.3.4 Normality Test (Shapiro-Wilk)

Statistic p
0.943 < .001
Page 18 of 52
The results show that the overall model is significant, with an R² of 0.972, indicating that
changes of 97.2% is impacted by the macroeconomic indicators and other 2.8% is impacted by
other various factors.
The dependent variable 1% in share price is changed if there is 13.1% change in the
independent variable that is the Macroeconomic factors.
The p value is <0.001 which states that H0 is rejected at 5% LOS, hence there is significant
impact of inflation, interest rates and GDP rates on Share prices of Agriculture companies.
The second table, “Omnibus ANOVA Test," provides summary statistics for each predictor in
the model.
The results show that GDP rates are significant in the model, with a p-value of < .001, while
inflation rates and interest rates are not significant, with p-values of 0.344 and 0.066,
respectively.
The third table labelled "Model Coefficients - SHARE PRICE," provides the estimates,
standard errors 256, t-values 9.32, and p-values <.001 for the model coefficients.
The results show that the intercept (i.e., the estimated value of share price when all predictors
are zero) is significantly different from zero, with a p-value of < .001.
Page 19 of 52
4.1.4. Granger Causality Test
Table 4.1.4.1 Pairwise Granger Causality Tests
F-
Null Hypothesis: Obs Statistic Prob.
INFLATION_RATES does not Granger Cause AGRI 91 2.46087 0.0914

AGRI does not Granger Cause INFLATION_RATES 0.35104 0.7050
INTEREST_RATES does not Granger Cause AGRI 91 4.28477 0.0168

AGRI does not Granger Cause INTEREST_RATES 6.02824 0.0035
GDP_RATES does not Granger Cause AGRI 91 0.45930 0.6333

AGRI does not Granger Cause GDP_RATES 0.44229 0.6440
Source: Retrieved from EViews and Authors own calculations.
The changes Inflation rate and the GDP rate is not forecasting any changes in the share prices
of the selected companies because the p value is 0.09 and 0.63 respectively. Therefore H0 is
accepted at 5% LOS, hence there is no effect of Inflation rates and GDP rates on the share
prices fluctuations.
The interest rates is able to forecast the changes in the share prices of the selected companies
because the p value is 0.01. Therefore, H0 is rejected at 5% LOS, hence there is a effect on the
share prices due to the cause of the interest rates.
Page 20 of 52
4.2. AUTOMOBILE INDUSTRY
Table 4.2.1.1 Descriptive statistics

N 93 93 93 93
Mean 8663 0.0491 0.0556 0.0515
Standard
3253 0.0153 0.0109 0.0479
deviation
Shapiro-Wilk p < .001 0.179 < .001 < .001
The standard deviation of Share prices is 3253, The standard deviation values for the
independent variables 0.0153, 0.0109, 0.0479 which are very high, stating that there is a
significant more amount of variation in the data.
Page 21 of 52
4.2.2. Correlation Matrix
Table 4.2.2.1 Correlation matrix
SHARE PRICE INFLATION RATES INTEREST RATES GDP RATES
SHARE PRICE Pearson's r —
p-value —
INFLATION RATES Pearson's r -0.561 *** —
p-value < .001 —
INTEREST RATES Pearson's r 0.610 *** -0.485 *** —
p-value < .001 < .001 —
GDP RATES Pearson's r 0.121 -0.347 *** 0.408 *** —
p-value 0.248 < .001 < .001 —
Note. * p < .05, ** p < .01, *** p < .001
Correlation Heatmap
Fig 4.2.2.1 Correlation heatmap
Page 22 of 52
There is a weak negative correlation (-0.561) between share price and inflation rates, with a p-
value of < .001. This means that as inflation rates increase, share price tends to decrease, and
vice versa. Therefore, the HO is rejected, hence there is a significant relationship between the
inflation rates and share prices of automobile sector.
There is a strong positive correlation (0.610) between share price and interest rates, with a p-
value of < .001. This means that as interest rates increase, share price tends to increase, and
when interest rates are decreased, share prices also decreased. Therefore, the HO is rejected,
hence there is a significant relationship between the interest rates and share prices of
automobile sector.
There is a positive correlation (0.121) between share price and GDP rates, with a p-value of
0.248. This means that there is no significant relationship between share price and GDP rates.
Therefore, the HO is accepted, hence there is no significant relationship between the GDP rates
and share prices of automobile sector.
Page 23 of 52
4.2.3. Regression Analysis
Table 4.2.3.1 Model Fit Measures

Overall Model Test
1 0.984 0.969 11.5 67 25 < .001

INFLATION RATES 45500000.00 48 947588 0.777 0.778

INTEREST RATES 39900000.00 12 3330000.00 2.728 0.017
GDP RATES 43400000.00 7 6200000.00 5.080 0.001
Residuals 30500000.00 25 1220000.00
Intercept ᵃ 6941.31 1749 3.96790 < .001

Statistic p
0.722 < .001
Page 24 of 52
impact of inflation, interest rates and GDP rates on Share prices of automobile companies.
The second table, labelled "omnibus anova test," provides summary statistics for each predictor
in the model.
The results show that GDP rates and Interest rates are significant in the model, with a p-value
of .001 and 0.017 respectively, while inflation rates are not significant, with p-values of 0.778
respectively.
The third table labelled "model coefficients - share price," provides the estimates, standard
errors 1749, t-values 3.97, and p-values <.001 for the model coefficients.
Page 25 of 52
Null Hypothesis: Obs F-Statistic Prob.
INFLATION_RATES does not Granger Cause AUTO 91 3.05596 0.0522

AUTO does not Granger Cause INFLATION_RATES 1.65602 0.1969
INTEREST_RATES does not Granger Cause AUTO 91 1.96196 0.1468

AUTO does not Granger Cause INTEREST_RATES 0.52447 0.5937
GDP_RATES does not Granger Cause AUTO 91 1.62639 0.2026

AUTO does not Granger Cause GDP_RATES 1.04529 0.3560
Source: Retrieved from EViews and Authors own calculations
The changes Interest rate and the GDP rate is not forecasting any changes in the share prices
of the selected companies because the p value is 0.146 and 0.202 respectively. Therefore, H0
is accepted at 5% LOS, hence there is no effect of Interest rates and GDP rates on the share
prices fluctuations.
The Inflation rates is able to forecast the changes in the share prices of the selected companies
share prices due to the cause of the inflation rates.
Page 26 of 52
4.3. INFRASTRUCTURE INDUSTRY

N 93 93 93 93
Mean 1477 0.0491 0.0556 0.0515
Standard
422 0.0153 0.0109 0.0479
deviation
Shapiro-Wilk p < .001 0.179 < .001 < .001
Page 27 of 52
Table 4.3.2.1 Correlation matrix
p-value —
INFLATION RATES Pearson's r 0.340 *** —
p-value < .001 —
INTEREST RATES Pearson's r -0.254 * -0.485 *** —
p-value 0.014 < .001 —
GDP RATES Pearson's r 0.345 *** -0.347 *** 0.408 *** —
p-value < .001 < .001 < .001 —
Note. * p < .05, ** p < .01, *** p < .001
Correlation Heatmap
Page 28 of 52
There is a positive correlation (0.340) between share price and inflation rates, with a p-value
of < .001. This means that as inflation rates increase, share price tends to increase, and when
inflation rate is decreased the share prices also decreases. Therefore, the HO is rejected, hence
there is a significant relationship between the inflation rates and share prices infrastructure
industries.
There is a negative correlation (-0.254) between share price and interest rates, with a p-value
of 0.014. This means that as interest rates increase, share price tends to decrease, and when
interest rates are decreased share prices increases. Therefore, the HO is rejected, hence there is
a significant relationship between the interest rates and share prices infrastructure industries.
<.001 This means that as GDP rates increase, share price tends to increase, and when GDP rate
is decreased the share prices also decreases. Therefore, the HO is rejected, hence there is a
significant relationship between the GDP rates and share prices of the infrastructure industries.
Page 29 of 52

Overall Model Test
1 0.992 0.984 22.6 67 25 < .001

INFLATION RATES 1040000.00 48 21571 2.03 0.029

INTEREST RATES 720370 12 60031 5.65 < .001
GDP RATES 2870000.00 7 410088 38.57 < .001
Residuals 265780 25 10631

Intercept ᵃ 1109.27 163.3 6.7918 < .001


Statistic p
0.949 0.001
Page 30 of 52
changes of 98.4% is impacted by the macro-economic indicators and other 1.6% is impacted
by other various factors.
impact of inflation, interest rates and GDP rates on Share prices of infrastructure companies.
in the model.
The results show that GDP rates, Interest rates and Inflation rates are significant in the model,
with a p-value of <.001, <.001 and 0.029 respectively.
errors 163.3, t-values 6.79, and p-values <.001 for the model coefficients.
Page 31 of 52
4.3.4. Granger Causality test
INFLATION_RATES does not Granger Cause IT 91 0.63279 0.5336

IT does not Granger Cause INFLATION_RATES 0.84345 0.4338
INTEREST_RATES does not Granger Cause IT 91 4.16760 0.0187

IT does not Granger Cause INTEREST_RATES 6.46133 0.0024
GDP_RATES does not Granger Cause IT 91 0.60113 0.5505

IT does not Granger Cause GDP_RATES 2.37244 0.0993
accepted at 5% LOS, hence there is no effect of Interest rates and GDP rates on the share prices
fluctuations.
The Interest rates is able to forecast the changes in the share prices of the selected companies
because the p value is 0.01. Therefore, H0 is rejected at 5% LOS, hence there is a effect on
the share prices due to the cause of the interest rates.
Page 32 of 52
4.4. INFORMATION TECHNOLOGY SECTOR

N 93 93 93 93
Mean 1561 0.0491 0.0556 0.0515
Standard
312 0.0153 0.0109 0.0479
deviation
Shapiro-Wilk p < .001 0.179 < .001 < .001
Page 33 of 52
p-value —
INFLATION RATES Pearson's r 0.312 ** —
p-value 0.002 —
INTEREST RATES Pearson's r -0.365 *** -0.485 *** —
p-value < .001 < .001 —
GDP RATES Pearson's r 0.451 *** -0.347 *** 0.408 *** —
p-value < .001 < .001 < .001 —
Note. * p < .05, ** p < .01, *** p < .001
Correlation Heatmap
Page 34 of 52
there is a significant relationship between the inflation rates and share prices of IT industries.
of 0.002. This means that as interest rates increase, share price tends to decrease, and when
interest rates are decreased share prices increases. Therefore, the HO is rejected, hence there is
a significant relationship between the interest rates and share prices of IT industries.
<.001 This means that as GDP rates increase, share price tends to increase, and when GDP rate
is decreased the share prices also decreases. Therefore, the HO is rejected, hence there is a
significant relationship between the GDP rates and share prices of the IT industries.
Page 35 of 52

Overall Model Test
1 0.982 0.963 9.81 67 25 < .001

INFLATION RATES 1120000.00 48 23373 1.78 0.061

INTEREST RATES 574342.00 12 47862 3.65 0.003
GDP RATES 1400000.00 7 200677 15.30 < .001
Residuals 327948.00 25 13118
Intercept ᵃ 1114.600 181.4 6.14361 < .001


Statistic p
0.892 < .001
Page 36 of 52
impact of inflation, interest rates and GDP rates on Share prices of IT companies.
in the model.
The results show that GDP rates, Interest rates are significant in the model, with a p-value of
<.001, 0.003 and Inflation rates are not significant in the model with p-value of 0.061
respectively.
errors 181.4, t-values 6.14, and p-values <.001 for the model coefficients.
Page 37 of 52
4.4.4. Granger Causality test
INFLATION_RATES does not Granger Cause INFRA 91 0.26120 0.7707

INFRA does not Granger Cause INFLATION_RATES 1.66078 0.1960
INTEREST_RATES does not Granger Cause INFRA 91 1.66589 0.1951

INFRA does not Granger Cause INTEREST_RATES 7.94328 0.0007
GDP_RATES does not Granger Cause INFRA 91 2.74273 0.0700

INFRA does not Granger Cause GDP_RATES 0.69265 0.5030
The changes Inflation rate, Interest rates and the GDP rate is not forecasting any changes in the
share prices of the selected companies because the p value is 0.770, 0.195 and 0.070
respectively. Therefore, H0 is accepted at 5% LOS, hence there is no effect of Inflation rates,
Interest rates and GDP rates on the share prices fluctuations.
Page 38 of 52
4.5. PHARMACEUTICAL SECTOR

N 93 93 93 93
Mean 2096 0.0491 0.0556 0.0515
Standard
761 0.0153 0.0109 0.0479
deviation
Shapiro-Wilk p < .001 0.179 < .001 < .001
Page 39 of 52
p-value —
INFLATION RATES Pearson's r 0.573 *** —
p-value < .001 —
INTEREST RATES Pearson's r -0.710 *** -0.485 *** —
p-value < .001 < .001 —
GDP RATES Pearson's r -0.052 -0.347 *** 0.408 *** —
p-value 0.617 < .001 < .001 —
Note. * p < .05, ** p < .01, *** p < .001
Correlation Heatmap
Page 40 of 52
there is a significant relationship between the inflation rates and share prices of pharma
industries.
of < .001. This means that as interest rates increase, share price tends to decrease, and when
interest rates are decreased, share prices increases. Therefore, the HO is rejected, hence there
is a significant relationship between the interest rates and share prices of pharma industries.
There is a negative correlation (-0.052) between share price and GDP rates, with a p-value of
0.617. This means that there is no significant relationship between GDP rates and the share
prices. Therefore, the HO is accepted, hence there is no significant relationship between the
GDP rates and share prices of the pharma industries.
Page 41 of 52

Overall Model Test
1 0.991 0.981 19.8 67 25 < .001

INFLATION RATES 1740000.00 48 36279 0.920 0.608

INTEREST RATES 1270000.00 12 105447 2.675 0.018
GDP RATES 2730000.00 7 389342 9.875 < .001
Residuals 985630 25 39425

Intercept ᵃ 2444.78 315 7.7730 < .001


Statistic p
0.890 < .001
Page 42 of 52
changes of 98.1% is impacted by the macro-economic indicators and other 1.9% is impacted
by other various factors.
impact of inflation, interest rates and GDP rates on Share prices of pharma companies.
in the model.
The results show that GDP rates, Interest rates are significant in the model, with a p-value of
<.0.001, 0.018 and Inflation rates are not significant in the model with p-value of 0.608
respectively.
errors 315, t-values 7.77, and p-values <.001 for the model coefficients.
Page 43 of 52
F-
Null Hypothesis: Obs Statistic Prob.
INFLATION_RATES does not Granger Cause PHARMA 91 1.94409 0.1494

PHARMA does not Granger Cause INFLATION_RATES 1.41216 0.2492
INTEREST_RATES does not Granger Cause PHARMA 91 4.56061 0.0131

PHARMA does not Granger Cause INTEREST_RATES 4.11999 0.0196
GDP_RATES does not Granger Cause PHARMA 91 2.80773 0.0659

PHARMA does not Granger Cause GDP_RATES 1.05089 0.3541
accepted at 5% LOS, hence there is no effect of Interest rates and GDP rates on the share prices
fluctuations.
The Interest rates is able to forecast the changes in the share prices of the selected companies
share prices due to the cause of the interest rates.
Page 44 of 52
CHAPTER 5: FINDINGS, SUGGESTIONS AND CONCLUSION
5.1. FINDINGS
The objective of the paper is to find the volatility of the share prices when there is change in
the macro-economic indicators such as Inflation, interest rates, GDP rates.
From the analysis we found that there is both positive and the negative impact on the share
prices of the various industries when there is rise or the decline in the macro-economic
indicators.
As we have taken the top performing companies in 5 various industries.
1. AGRICULTURE INDUSTRY
• From the descriptive analysis we found that there is more variation caused by the
selected macroeconomic indicators.
• According to the correlation analysis, found that the GDP rates have no effect on the
share prices of agricultural-related businesses; instead, the only factors that affect them
are interest rates and inflation.
• From the regression analysis found that the share prices of the top performing
companies of Agri industries are impacted 97.2% by the Inflation, interest rate and GDP
rates.
• The Causality revels that inflation and GDP rates are not forecasting the Share prices.
2. AUTOMOBILE INDUSTRY
companies of Automobile sector are impacted 96.9% by the Inflation, interest rate and
GDP rates.
• The Causality revels that interest rate and GDP rates are not forecasting the Share
prices.
Page 45 of 52
3. INFRA SECTOR
companies of Infrastructure industries are impacted 98.4% by the Inflation, interest rate
and GDP rates.
• The Causality revels that inflation and GDP rates are not forecasting the Share prices.
4. IT SECTOR
companies of IT industries are impacted 96.3% by the Inflation, interest rate and GDP
rates.
• The Causality revels that Inflation, Interest rates and GDP rates are not forecasting the
Share prices.
5. PHARMA INDUSTRY
companies of Pharma industries are impacted 98.1% by the Inflation, interest rate and
GDP rates.
• The Causality revels that Inflation and GDP rates are not forecasting the Share prices.
Page 46 of 52
5.2. SUGGESTIONS
There are some future scopes for the study, such as

• The investors considering these macro-economic factors, they should also consider
other factors as well.
• To improve the returns or the yield on the investments the investor can choose the better
industry stocks for the investment.
• As we have considered only the top performing companies, investors can also consider
the other companies in the various industries.
• We get to see that the capital market in India is more volatile this is because of some
internal news as well as the external uncontrollable factors.
• Even the companies or the organisations of various industries should also can refer to
the external uncontrollable factors which will decide their position in the market.
5.3. CONCLUSION
The Intention of the study was to make the normal people understand about the movement that
occurs in the share prices. In recent days stock markets have become an integral part in the
economy, people in India are attracted towards investing in these capital markets.
They want to know how these macro-economic indicators are influencing the share prices.
The advantage of the study is that the investors would get a clear picture about the companies
from which industry they can choose and how are the movement of those securities in the
market. The data collected was very reliable for the study as we took the top performing
companies from 5 industries. To conclude the companies of all the 5 industries are being
impacted but, by comparing all the 5 industries, it is seen that the infrastructure and the pharma
companies share prices are impacting heavily and the other Agri, auto and IT industries are
impacted to the greater extent is well.
To conclude the study was to give the clear picture and to eliminate the dilemma for the
investors, so that they can choose the shares they want, to invest wisely.
Page 47 of 52
REFERENCES
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companies of the finance and insurance sector from Latin American stock
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Macro Economic variables on stock return of companies that listed in stock exchange:
Empirical evidence from Indonesia. International Journal of Business and
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impact on stock markets in ASIAN 3: A pooled mean group approach. Cogent
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Indian stock market, united world school of business, 1-18.
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Nigeria. Journal of Economics, Management and Trade, 22(6), 1-14.
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stock prices: An empirical analysis. Studies in Business and Economics, 12(1), 61-78.
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Indian stock market: A heteroscedastic cointegration approach. Business and Economic
Horizons, 13(1), 119-127.
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An Exploration, Banaras Hindu university, 10-13.
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study of Indian stock market, University of Delhi. 223-267.
16. KV (2019). Investigating the impact of select macroeconomic indicators on stock
market development – a global perspective, Anna university Chennai, 71-91
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Empirical Evidence, Banaras Hindu University, 99-133
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Indian stock market , Bharathidasan university, 262-275
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Empirical Analysis, Symbiosis international university, 3-11
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Page 49 of 52
ANNEXURE
Website links
https://www.bseindia.com/
https://www.rateinflation.com/
https://in.investing.com/
https://www.kaggle.com/
Sample Data
1. Agriculture Industry
Page 50 of 52
2. Automobile Sector
3. Infrastructure Industry
Page 51 of 52
4. IT Sector
5. Pharmaceuticals Industry
Page 52 of 52
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Page 56 of 52

The Impact of Inflation, Interest Rates and GDP On Stock Prices-A Comparative Analysis

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The Impact of Inflation, Interest Rates and GDP On Stock Prices-A Comparative Analysis

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THE IMPACT OF INFLATION, INTEREST RATES AND GDP ON

STOCK PRICES-A COMPARATIVE ANALYSIS

In partial fulfillment of the requirements for the award of the degree of

Under the guidance of

GLOBAL ACADEMY OF TECHNOLOGY

The sense of accomplishment comes with completing a mission. It would be incomplete if it

I honestly thank Dr. N VENKATESH KUMAR, Head of the department, Department of

I sincerely thank Dr. S. GOKULA KRISHNAN, Associate professor, Department of

4.1.2.1 Correlation Heatmap of Agri industry 16

4.2.2.1 Correlation Heatmap of Auto industry 22

4.3.2.1 Correlation Heatmap of Infrastructure industry 28

4.4.2.1 Correlation Heatmap of IT industry 34

4.5.2.1 Correlation Heatmap of Pharma industry 40

In conclusion, this study highlights the importance of macroeconomic variables in determining

Keywords: Inflation, Interest rates, GDP rates, Share prices, Investors.

1.1. Introduction of the Study

1.2. Theoretical Framework

Keswani, 2019, An In-Depth Examination of the Impact of Macroeconomic Variables on

Abdallah & Abualjarayesh, 2017The stock market's performance is influenced by

Kalam, 2020, Malaysian stock market performance are influenced by macroeconomic

3.1. Research Approach

3.2. Research design

3.2.1. Sampling framework and Data Collection

Industry Type No of Name of the companies

Infrastructure 3 ABB India Ltd

3.2.2. Statistical design

1. Descriptive Statistics: To comprehend a population's characteristics, such as its mean,

3.2.3. Data collection

The Data collected for the analysis is the secondary data.

3.3. Statement of Problem

3.4. Need for the study

The stock market is a complicated system driven by a variety of factors, including

3.5. Objective of the study

3.6. Hypothesis Formulation

companies under various industries.

The analysis will be conducted sector wise.

4.1. AGRICULTURE SECTOR

4.1.1. Descriptive analysis

Table 4.1.1.1 Descriptive Statistics

SHARE INFLATION INTEREST GDP

Source: Retrieved from JAMOVI and Authors own calculations.

Table 4.1.2.1 Correlation Matrix

SHARE INFLATION INTEREST

Note. * p < .05, ** p < .01, *** p < .001

Source: Retrieved from JAMOVI and Authors own calculations.

Fig 4.1.2.1 Correlation Heatmap

Table 4.1.3.1 Model fit measures

1 0.986 0.972 13.1 67 25 < .001

Table 4.1.3.2 Omnibus ANOVA Test

INFLATION RATES 1460000.00 48 30469 1.17 0.344

Note. Type 3 sum of squares

Table 4.1.3.3 Model Coefficients - SHARE PRICE

Intercept ᵃ 2384.07 256 9.3166 < .001

Table 4.1.3.4 Normality Test (Shapiro-Wilk)

Source: Retrieved from JAMOVI and Authors own calculations.

Table 4.1.4.1 Pairwise Granger Causality Tests

INFLATION_RATES does not Granger Cause AGRI 91 2.46087 0.0914

INTEREST_RATES does not Granger Cause AGRI 91 4.28477 0.0168

GDP_RATES does not Granger Cause AGRI 91 0.45930 0.6333

Source: Retrieved from EViews and Authors own calculations.

4.2.1. Descriptive analysis

Table 4.2.1.1 Descriptive statistics

SHARE INFLATION INTEREST GDP

Note. * p < .05, p < .01, * p < .001

INTEREST RATES Pearson's r 0.610 * -0.485 * —

GDP RATES Pearson's r 0.121 -0.347 * 0.408 * —

Note. * p < .05, p < .01, * p < .001

GDP RATES Pearson's r 0.345 * -0.347 * 0.408 *** —

Note. * p < .05, p < .01, * p < .001

INTEREST RATES Pearson's r -0.365 * -0.485 * —

GDP RATES Pearson's r 0.451 * -0.347 * 0.408 *** —

Note. * p < .05, p < .01, * p < .001