Macroeconomic Factors for Stock Return in Nepal
Abstract
This study examines the relationship between key macroeconomic variables and the stock market return in Nepal, particularly focusing on the NEPSE Index. Using time series data from 2014 to 2023 and employing multiple regression analysis, the study evaluates the influence of interest rate, inflation rate, exchange rate, industrial production, and broad money supply on stock market performance. Results reveal that exchange rate and money supply significantly and positively affect NEPSE, while inflation and interest rates show a negative but statistically insignificant impact. The findings are expected to aid investors and policymakers in understanding economic drivers of market behavior in Nepal.
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References
Nepal Research Department (2014) Macro Modeling Practices at Nepal Rastra Bank. 30(1), 1-18.
Nai-Fu Chen, Richard Roll, Stephen Ross (1986) Economic Forces and the Stock Market. 59(3), 383.
E Fama (1981) Stock returns, real activity, inflation, and money.
Donatas Pilinkus (2010) MACROECONOMIC INDICATORS AND THEIR IMPACT ON STOCK MARKET PERFORMANCE IN THE SHORT AND LONG RUN: THE CASE OF THE BALTIC STATES / MAKROEKONOMINIAI RODIKLIAI IR JŲ ĮTAKA AKCIJŲ RINKOS INDEKSUI TRUMPUOJU IR ILGUOJU LAIKOTARPIU: BALTIJOS ŠALIŲ ATVEJIS. 16(2), 291-304.
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2025-11-25
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