IMPACTS OF MACRO ECONOMIC FACTORS ON STOCK MARKET RETURNS: EVIDENCE FROM NEPAL

Abstract

This study analyzes Impact of macro economic factors on stock market returns :Evidence from Nepal. It Collect the data from 1994/95 to 2022/2023.This study has taken descriptive and causal relationship research design to analyze the correlation and impact of macro economic variables in Stock market returns and has employed SPSS with descriptive analysis, correlation analysis and multiple regression analysis. The correlation analysis examined that Real gross domestic product shows a strong positive correlation with stock market return. Money supply 2 exhibits very strong positive correlations with stock market return suggesting that higher MS2indicate higher exchange rate. Interest rate, Inflatation rate and Exchange rate shows a weak insignificant correlation with stock market returns the analysis indicates that GDP, money supply, and exchange rates are strongly correlated with stock market returns, while interest rates and inflation have less impact on these returns. The multiple regression analysis reveals a positive and significant impact on money supply 2 means that increase in MS2 leads to higher in stock market return .Real Gross Domestic Product had negative but marginally significant effect on stock market return.it leads to negative relationship with stock market return. Interest rate, Inflatation rate, and Exchange rate had insignificant minimal and statistically insignificant relationship with Stock market returns.