Page 100 - IMDR JOURNAL 2023-24

IMDR’s Journal of Management Development & Research 2023-24

determine the statistical dynamics over the long and short terms. The study's conclusions demonstrate
the co-integration of macroeconomic factors with Indian stock indexes. Only the BSE Sensex was

significantly impacted by the foreign currency rate. There is a strong relation between BSE Sensex, S&P
CNX Nifty and fluctuating GDS. Study came to the conclusion that while capital markets indexes are

reliant on macroeconomic factors, this dependence may not always be statistically significant.

Moodley, F., Nzimande, N., &Mazindols, P.-F. (2022) examined how shifting market conditions affected
the returns of the Johannesburg Stock Exchange (JSE) indexes when macroeconomic variables were

present. Between February 1996 and December 2018, the authors used Markov regime-switching
models to study how seven JSE sector-based indexes responded to switching changes in macroeconomic

conditions. Although nonlinear models may more accurately approximate this link, the AMH explains
the relationship between macroeconomic conditions and stock market performance.

Garg, K., & Kalra, R. (2018) This Study examined the Sensex as a dependent variable and the

macroeconomic indices as independent factors. Period for the was from 1991 to 2017. With the exception
of the average inflation and unemployment rate, which exhibit a negative correlation, the study's findings

indicate a positive relationship between the Sensex and macroeconomic variables.

Stock markets are essential to the economy's ability to generate money, propel economic growth, and

expand overall. Determining the elements influencing the stock market is essential in developing

countries like India. Most earlier studies stay true in saying that scientists can't agree on what influences
the direction and volatility of the stock market. For this reason, it is essential to search for elements that

have a major impact on its volatility.

Methodology:

The study was based on secondary data collected through different websites.

Data was collected for different variables S&P BSE Sensex closing value, Total net FII (Foreign

institutional investors) investment, gold price per gram, Consumer Price Index (CPI) for retail inflation

and repo rate for the financial year 2022-23. Total data was available for 242 working days in a year.

Total Net FII was calculated by adding ‘Net Equity Purchase or Sale’ and ‘Net Debt Purchase or Sale’.

Objectives:

1. To study the combined impact of FII (Foreign institutional investors) investment, gold price per

gram, Consumer Price Index (CPI) for retail inflation and repo rate on S&P BSE Sensex

2. To determine whether Foreign Institutional Investors data is useful in forecasting S&P BSE
Sensex.