Macro-economic Variables and Stock Prices in India: Influence of Economic Fundamentals on Stock Market Returns

The government?s conduct of macroeconomic policy plays a unique and pivotal role in managing economic stability at the national level. As macroeconomic policies that are properly crafted and implemented help overcome many constraints like information asymmetry and coordination failures amongst regulatory institutions and markets, besides; a stable macroeconomic environment enables financial intermediaries to employ savings in productive activities thereby offering handsome returns to investors. Owing to the growth and development of financial markets across emerging economies, particularly India with its domestic saving on the rise, the policy makers, financial markets professionals, research scholars and academia are faced with unprecedented challenges when it comes to understanding volatility in stock market returns, in this direction this book focuses on the influence of select macroeconomic variables on stock market returns in India and will be helpful for business and economics graduates in understanding interaction between various macroeconomic fundamentals and can also serve as first step for research scholars in the field of financial economics.