The effect of global economic factors on stock market volatility

Abstract

newline The stock market is a vital component of the global financial system, where investors buy and sell publicly traded company shares. Stock market volatility refers to fluctuating stock prices over a given period. Many factors, including economic, political, and financial variables, influence it. Global economic factors play a significant role in shaping stock market volatility. The global economy is interconnected, and events in one country or region can have far-reaching consequences on stock markets worldwide. For instance, economic indicators such as GDP growth, inflation, and interest rates can impact investor sentiment and drive stock market movements. Macroeconomic indicators are key drivers of stock market volatility. Higher GDP growth rates generally indicate a healthy economy, which can lead to increased corporate profits and positive investor sentiment. Conversely, a slowdown in economic growth or recession can raise investor concerns and result in higher Volatility. newlineThis research delves into the intricate relationship between global economic factors and stock market volatility, seeking to unravel the multifaceted dynamics that govern financial markets. The study employs a comprehensive analysis of historical data, employing statistical models to discern patterns and correlations between key economic indicators and fluctuations in stock prices. The investigation encompasses a wide array of global economic factors, including but not limited to GDP growth rates, inflation rates, interest rates, and trade balances. By examining the interplay between these factors and stock market volatility, the research aims to contribute valuable insights into the mechanisms that drive market fluctuations on an international scale. Furthermore, the study considers the impact of geopolitical events and policy changes on stock market behavior. By incorporating both macroeconomic and geopolitical perspectives, the research aims to provide a holistic understanding of the forces shaping stock market volatility in an increasingly interconnected world. newlineIn this study, we a