Roop Lal Sharma and Ajay Kumar Sharma
The main objective of the paper is to investigate the impact of macroeconomic variables on Indian stock exchange market with the help of the multivariate stepwise regression analysis. Grangerâs causality test has been applied to analyze the dynamic causal relationship among the variables. The dependent variables in the study includes average monthly closing price of BSE sensex and S&P CNX Nifty while the independent variables are Index of Industrial Production (IIP), Wholesale Price Index (WPI), Money Supply(M3), Interest Rates (IR), Trade Deficit (TD), Foreign Institutional Investment (FII), Exchange rate (ER), Crude Oil Price (CP) and Gold Price (GP). The data used in the study has been considered from January 2016 to December 207. The empirical result of the study shows significant impact of macroeconomic variables on Indian stock market. There exists requirement for the initiative to be taken by government to reduce interest of investors in yellow metal and enhance the investment in share market.