Analyzing the relationship between marcoeconomic factors and stock markets return

Abstract

Analyzing the Relationship between Macroeconomic Factors and Stock Markets Return is the title of the study. Examining the effects of the money supply, GDP, interest rate, inflation rate, and foreign exchange rate on the NEPSE index is the goal of this study. Essentially, the macroeconomic variables are determined by both qualitative and quantitative aspects.

NEPSE is the dependent variable in this study, and the experiment factors include the money supply, GDP, interest rate, inflation rate, and foreign exchange rate. The secondary data was collected from the websites of NEPSE, SEBON, and the Ministry of Finance over a fifteen-year period (2009/10 to 2023/24). The data is analyzed and interpreted using SPSS version 23, with a descriptive and casual comparative study methodology. Correlation research shows that NEPSE has weak positive correlations with the money supply, interest rate, and foreign exchange reserve, while NEPSE and GDP have a weak negative link, suggesting a minor tendency for these variables to move in the same direction. A multiple linear regression model has been used to show how independent variables affect NEPSE. The result demonstrates that, while having an adverse effect on NEPSE, the interest rate and inflation rate are not statistically significant. In a related vein, GDP and money supply both positively impact NEPSE; the former is statistically significant while the latter is not insignificant.

Key Words: NEPSE, GDP, Interest Rate, Inflation Rate, Foreign Exchange Rate