STOCK PRICE MOVEMENT AND THE REAL ECONOMIC PRODUCTION – CAUSALITY ANALYSIS WITH FINANCIAL MODELS IN INDIAN CONTEXT
STOCK PRICE MOVEMENT AND THE REAL ECONOMIC PRODUCTION – CAUSALITY ANALYSIS WITH FINANCIAL MODELS IN INDIAN CONTEXT

Summary/Abstract: This study work with the relationship between stock price movement and real economic production. Here drawing of two theoretical models supports my study. The study investigates the relationships between the Indian stock market index (BSE Sensex) and five macroeconomic variables, namely, industrial production index, wholesale price index, money supply, exchange rate and call money rate over the period March-1992 to June-2015. Vector Auto Regressive (VAR) model have been applied to explore relationship between stock market index and macroeconomic variables. The analysis reveals that relationship exists between the stock price return and industrial production and stock price return affects the performances of real sector production.

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