Research Methodology

Impact of interest rate on stock

market performance

Karan Nirmal
21305B0007
SYBAF/B
 Interest rates are one of the most important economic
indicators and have a significant impact on various aspects of
the economy, including the stock market. The Federal reserve
sets interest rates to achieve specific economic goals, such as
controlling inflation and promoting growth. However, the
Introduction relationship between interest rates and stock market
performance is complex and not always clear. The purpose of
this research paper is to explore the relationship between
interest rates and stock market performance, and to examine
the potential impact of interest rate changes on the
stockmarket.
 Research methodology

Need of the study

• To better understand the factors that influence stock prices and
overall market performance.
• To help investors make more informed decisions about when to
buy or sell stocks.
• To inform monetary policy decisions by central banks and other
policy-makers, who may seek to influence interest rates in order
to achieve certain economic goals (such as controlling inflation
or promoting economic growth).
• To explore the relationship between financial markets and the
real economy, as changes in interest rates can affect borrowing
costs for businesses and consumers, and therefore impact
spending, investment, and economic activity more broadly.
Objectives of the study
• To examine the relationship between interest rates and
stock market performance.
• To identify the potential impact of interest rate changes on
the stock market.
• To explore the potential reasons for the relationship
between interest rates and stock market performance.
Conclusion
In conclusion, interest rates have a significant impact on the stock market through
their effect on the cost of capital, economic activity, inflation, and growth.
However, the relationship between interest rates and stock market performance is
complex and can vary depending on the economic conditions and other factors.
Further research is needed to fully understand the impact of interest rates on the
stock market and to develop strategies for predicting and responding to interest rate
changes. As the economy and financial markets are dynamic, it's important for
investors and analysts to stay informed about the latest developments and to
incorporate interest rate changes into their investment strategies in a responsible
and strategic manner.