In terms of macroeconomic reporting, the interest rate is the nominal rate. As supply begins to outweigh demand, prices may again dip, leading to additional prosperity until the next shift in economic supply and demand. The independent variable which is used by the researcher is Shanghai composite index.
If the actual aggregate unemployment rate is at or below the benchmark rate, the economy is considered to be fully employed. Two main variables which are used in this study are stock prices and exchange rate.
The outcome show that the constant relationship among the two variables. Different model which are apply in this article are Unit root test and Granger Causality test, Augmented Dickey Fuller, and Normality test.
The capital market has an excessive role in the economic progress and improvement because it carries the funds from that person which has enough funds to that person which is needy.
For example, if the housing market has an excess of inventory and a decline in the number of buyers, lenders might reduce mortgage interest rates to stimulate demand. Two models are used: Arbitrage Pricing Theory Arbitrage pricing theory explains the relationship between returns of a single asset and returns of portfolio with a linear arrangement of different independent macroeconomic variables.
The independent variables are exchange rate, interest rate and inflation.
Neutral Macroeconomic Factors Certain economic shifts are neither positive nor negative. Cointegration model is used to check the connection of stock price and exchange rate.
PAKISTAN Descriptive statistics Measures of central tendency include the mean, median and mode, while measures of variability include the standard deviation or variancethe minimum and maximum variables, kurtosis and skewness. Chapter no five based on conclusion. The stock market has important role because with the help of these markets investor can make guess about the economy condition and investor can also make idea that either he should invest at that time or he should delay.
Because market and economy are connect with each other. The model which used is multi regression model. Stock prices, oil prices and exchange rate have specific effect on financial markets.
Further, if the interest rates decrease then the charges on a loan to buy larger items like cars, electrical equipments are likely to fall. The nature of the change, such as enacting or rescinding a trade embargowill have a variety of effects depending on which economy is being examined.
The both theories are used to illustrate the relation of stock market return with macroeconomic variables. Crude Oil Price Oil price is independent variable. Stock price is dependent variable. This theory is developed by Stephen Ross in The impact of macroeconomic variables on stock returns has been the subject of increased theoretical and empirical investigation in literature.
This book aims to complement the literature by extending this presumed relationship between stock returns and a set of pre-determined domestic and global macroeconomic variables to the. A macroeconomic factor can include anything that influences the direction of a particular large-scale market; for example, fiscal policy and various regulations can impact the economy of a state or nation and can even have international implications.
Not all macroeconomic factors are negative; some promote economic growth. Full-Text Paper (PDF): Impact of Macroeconomic Variables on Stock Returns: Evidence from KSE Index of Pakistan. Key macroeconomic variables include interest rates, which are a reflection of the risk of borrowing (not unlike the emotional price you might pay when borrowing cash from a family member).
In terms of macroeconomic reporting, the interest rate is the nominal rate. An econometric analysis of impact of macroeconomic variables on Stock Market movement in NigeriaAsian Journal of Business Management, 3(1).
(). Macroeconomic factors are those factors that relate specifically to the broader or wider economy at a regional level or a national level. Such factors affect a much larger population as opposed to a small number.Download