Dynamics between macro-economic variables and the stock market: Evidence from India

The present paper examines the dynamics between macroeconomic variables and stock market. index of industrial production, inflation, gold price, oil return from treasury bills have been used as proxy variables. Indian market has typified by Sensex. Monthly observations analyzed April 1993 to October 2022 through cointegration Granger causality test examine possible long-run short-run relationships, respectively. results proclaim presence among Further, analysis normalized cointegrating coefficients reveals that in long run, changes inflation rate T-bills positively affect While prices a negative impact on implies short is sensitive prices. are expected be fruitful for investors well traders when designing their investment trading strategies. Since indicate volatility can significantly prices, regulators should vigilant about perturbations mitigate adverse effects.