Abstract
This research project aims to investigate the effectiveness of macroeconomic factors on the returns of the Nifty50 index, a benchmark index representing the performance of the top 50 companies listed on the National Stock Exchange of India. The study explores the relationship between key macroeconomic variables and Nifty50 returns to assess the impact of economic indicators on stock market performance. To achieve this objective, the research employs quantitative methods and statistical analysis. The study utilizes historical data on Nifty50 returns and various macroeconomic factors such as inflation rates, interest rates, CPI rates, gold and silver rates, exchange rates, oil prices, industrial production index change, Money supply and trade balance. These factors are commonly regarded as influential indicators in determining the overall health and performance of an economy. The research project seeks to identify the significant macroeconomic variables that exhibit a strong correlation with Nifty50 returns. Additionally, it aims to examine the nature of the relationship between these variables and stock market performance, whether it is positive or negative. By understanding these dynamics, investors, policymakers, and market participants can gain valuable insights into the drivers of stock market returns and make informed decisions. The findings of this study have the potential to contribute to the existing body of knowledge on the relationship between macroeconomic factors and stock market returns. The results may have implications for portfolio management, risk assessment, and investment strategies in the Indian stock market. Furthermore, policymakers can utilize the insights to develop effective economic policies and regulations to promote market stability and growth. Overall, this research project endeavours to shed light on the effectiveness of macroeconomic factors as predictors of Nifty50 returns, providing valuable insights for market participants and stakeholders.
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