Investigating the impact of select macroeconomic indicators on stock market development a global perspective

Abstract

In recent times stock market is considered as the barometer of the economic performance of a country The potential of the firms listed in the stock market is reflected in the stock index It is expected that the performance and the pace of economic growth of the economy is reflected in the stock market movements The financial analysts macro economists and researchers look upon to the macroeconomic trends to analyze and interpret the stock market indices Thus in order to evaluate the performance of the stock markets it is essential to understand the movements of the economy This research is an attempt to examine the relationship between Macroeconomic indicators and stock markets in four groups of countries across the world The literature review revealed that most of the studies focused on individual markets emerging markets and regional markets There is lack of studies regarding global stock markets This shows the gap that this study sheds light on This study investigates four categories of countries consisting of 51 countries This attempt will supplement with new knowledge to the current body of literature This study also distinguishes between the impact of two groups of macroeconomic variables viz domestic and international This study is the initiative taken in this area Distinct from the earlier studies this study views stock markets in two dimensions viz stock market movement and stock market development Therefore it investigates the impact of domestic and international macroeconomic variables on stock market movement as well as stock market development Stock market movement is represented by the stock market index and stock market development is represented by market capitalization as a percentage of Gross Domestic Product newline