Factors Affecting Stock Prices in India: A Time Series Analysis

The research has been undertaken to study the relationship between macro variables such as Inflation, Index of Industrial production(IIP), Money Supply, Oil prices, Exchange rates, Gold prices and Gross domestic product (GDP) and Stock Prices using time series regression. The sample of the study consists macro variables and stock prices for the period 2004-2013 on quarterly basis. The study revealed that only Exchange Rate, Oil Prices and Inflation have significant impact over Stock prices.Further we observed that Exchange Rate and Inflation are negatively related to Stock prices and Oil prices are positively related. Another interesting result that we observe is that gold price does not have any major impact over the stock prices.