Impact of commodities and Exchange rates on Stock exchange Indices in India

Abstract

The country’s economic growth can be measured using stock market indices. Sensex and Nifty are the barometers of the Indian economy which measure the performance. Any country’s economic growth depends upon various factors. Out of which gold prices, crude oil prices and US Dollar exchange rates are found to be the important factors which have an impact on the stock market indices. Sensex being Asia’s oldest stock exchange and NSE being the most popular stock exchange of the country are selected for the purpose of the study for a period of 12 years from 2008 to December 2020. Tools like descriptive statistics, Correlation Matrix and OLS Regression Model is used. From the study it is found that from the selected variables crude oil prices and exchange dollar rates have a significant impact on Sensex and Nifty whereas gold prices do not affect the index movements.