Page 103 - IMDR JOURNAL 2023-24

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

net FII (Foreign institutional investors) investment, gold price per gram, Consumer Price Index (CPI)
for retail inflation and repo rate.

Correlation between the S&P BSE Sensex and all selected economic variables was calculated using R
(4.3.2). It gives a sense of how strongly two variables have a linear relationship. In order to determine

whether the values of one variable can be utilized to predict the values of another, we also examined the

Granger-causality between the two variables. To verify Granger-causality between two variables, the
Granger-causality test was run.

Multiple regression model is:

S&P BSE Sensex = 3.457e+04 + 2.822e-01 (FII) + 6.694e-01 (Gold Price) + 2.846e+04 (CPI) +

2.345e+05 (Repo rate) + Ɛ

Multiple regression model output:

Using above summary,