Impact of Macroeconomics variable on the Stock Market index; A Study From Pakistan

Abstract

The focal point of this research article is to examine the possible impact of macroeconomic variable like fiscal policies and monetary policies (interest rate) and inflation rates on stock market performance in Pakistan. The Pearson correlation and regression analysis techniques were applied. For this purpose monthly data have been used. The paper finds that the Pakistan stock market index is significantly affected by the fiscal policy, monetary policy and inflation. The results have shown that the interest rate  and government revenue have a significant negative relationship with the stock market index in Pakistan, whereas the inflation rate and the government expenditures have a significant positive relationship with the stock market Index in Pakistan.