Impact of inflation and gdp on stock market returns in india
Answers
Answer:
Inflation and GDP are the two main important macro-economic variable. GDP is an Economic indicator of the market value of all finished goods and service produced over a period (Quarterly or yearly) of time. There has been decline in the GDP growth rate in the year 2017 comparing to previous year. Several factors including global situation are responsible for the decline in GDP growth rate. And also Inflation is a continued growth in the general price level of goods and services in an economy over a period of time. When the price level increases, each component of currency buys fewer goods and services; therefore, inflation reflects a decrease in the acquiring influence per unit of money.
Explanation:
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Answer:
Stock prices were represented by Stock Market Value Index in the model. A regression analysis showed that the explanatory variables accounted for 95.6% of the variation in stock prices. While a reduction in interest and inflation rate resulted in increased stock prices, increased RDGP has a positive impact.