A PROJECT REPORT ON ANALYSIS OF MARKET RETURN INFLUENCEDBY MAJOR ECONOMIC INDICATORS

Abstract

The dynamic interplay between a country's macroeconomic conditions and its financial markets has long fascinated economists and investors alike. In an emerging economy like India, understanding this relationship takes on renewed significance given the rapid development and increasing integration with the global economy. This project report titled "Analysis of Market Returns Influenced by Major Economic Indicators" aims to unravel the impact of key Indian economic indicators on the stock market returns of major companies listed on the National Stock Exchange (NSE) from 2010 to 2022.

This project report analyzes the relationship between major economic indicators and market returns of stocks listed on India's National Stock Exchange (NSE) from 2010-2022. Using descriptive statistics and multivariate analysis, the study examines the impact of key indicators including inflation, trade balance, unemployment, exports, imports, and foreign direct investment on the returns of six major Indian companies - Reliance, TCS, Infosys, Wipro, ITC and Mahindra. The analysis finds statistically significant correlations between the economic indicators and stock returns, though the direction and magnitude of impact vary across companies. Overall, the study concludes that macroeconomic factors have a definitive influence on Indian equity market performance. However, given fluctuations over the period examined, the results underscore the importance of diversification and continuous tracking of economic trends for investment decisions. The report provides useful insights for investors seeking to understand how the Indian economy shapes stock market behavior. It recommends monitoring high-impact indicators like trade and FDI closely, and tailoring portfolios to individual risk appetites.

Keywords:- stock market returns, economic indicators, inflation, trade balance, unemployment, exports, imports, foreign direct investment, National Stock Exchange, descriptive statistics, multivariate analysis, financial markets, macroeconomics, investment strategies, equity investments, emerging economies, India