Decoding Nifty 50: Impact of Macro Economic Factors on the Indian Stock Market

Abstract

India is considered to be 4^th largest economy as far as GDP is concerned, but major question lies that are it really growing? And what are those macro economic factors? Which has been considered as parameter of the growth? To answer this questions researcher has made an effort to check impact of the macroeconomic environment on Nifty50, as various studies shows that there has been strong relation between Nifty50 and GDP. The Indian stock market, measured by market capitalization to GDP ratio, has a significant and increasing contribution to the country's economy. This ratio has reached a 15-year high of 140.2%, amplifying that the total value of listed companies exceeds India's GDP by a substantial margin. This signifies a impactful increase in the stock market's influence on the overall economy. Thus researcher wants to test the relationship between Nifty50 & Macroeconomic variables which are inflation, interest rates, exchange rates, FII, silver prices, and gold prices. For the purpose of the research Last five years data are considered i.e 2020-2024 with descriptive research design and statistical regression is measured so as to identify the most crucial variable amongst all macroeconomic variables that affects the Nifty50. Though, study does not claim any relation amongst them before 2020 and after 2024.