top of page
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
crossref
doi
open access

Published: 01 March 2023

Inflation and Stock Market Returns: An Empirical Study of Sectoral Indices with Special Reference to India

Khurshid Ali, Irshad Ahmad Malik, Khalid Ashraf Chisti, Numaira Showkat

Higher Colleges of Technology (United Arab Emirates), University of Kashmir (India)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

Download Full-Text Pdf

doi

10.31014/aior.1992.06.01.493

Pages: 148-154

Keywords: Inflation, Stock Market Returns, Sectoral Indices

Abstract

In this study an attempt has been undertaken so as to establish the relationship between sectoral indices returns and inflation numbers. In order to achieve the objective of the study, all the sectoral indices have been taken in the study except two (02) indices because they were introduced in the National Stock Exchange in the recent past and, therefore, their data is not available for the whole reference period of the study. The indices that are in the study are, (CNX Auto Index, CNX Bank Index, CNX Energy Index, CNX Finance Index, CNX FMCG Index, CNX IT Index, CNX Metal Index, CNX MNC Index, CNX Pharma Index, CNX PSU Bank Index). The study took eight years of reference period throughout which all the indices that are included in the sample were available. The researchers have employed Pearson correlation method so as to establish the relationship between inflation and sectoral indices returns. The findings of the study put forth that most of the indices do possess statistically significant relationship with inflation numbers.

References

  1. Ioannides, D. Katrakilidies, C. and Lake, A. (2000), “The relationship between Stock Market returns and Inflation: An Econometric Investigation using Greek data”

  2. Adrangi, B. Chatrath, A & Sanvicente, A. Z. (2000), “Inflation, Output and Stock Prices: Evidence from Brazi” Working Paper, 34.

  3. Wei, C. (2007), “Does the Stock Market React to Unexpected Inflation Differently Across the Business Cycle?” George Washington University. 19(24): 1947-1959.

  4. Geyser, J. M & Lowies, G. A. (2001), “The impact of inflation on stock prices in the SADC countries”. Universiti of Pretoria, Working Paper, 14.

  5. Khursheed Ali, Khalid Ashraf Chisti and Mohi-ud-din Sangmi. (2014), “An analysis of Bi-directional Relationship between Foreign Exchange prices and Stock Markets prices (Indian Evidence).” Advances in Management; Indore, Vol. 7, Issue 1, pp. 41-43.

  6. T. Choudry (1998), “Inflation and Rates of Return on Stocks: Evidence from High Inflation Countries”. Discussion Paper,University of Wales Swansea, Department of Economics.

  7. X-Q. Zhao (1999), “Stock Prices, Inflation and Output: Evidence from China”. Applied Economics Letters, 6, pp. 509-11.

  8. Khalid Ashraf Chisti, Saila Shakeel and Khursheed Ali Ganai. (2020), “An Analysis of Interaction among Macroeconomic Variables through Cointegration and Causality Approach.” Journal of Economics and Business, Vol.3, No.2, 811- 824.

  9. M. Omran –J. Pointon (2001), “Does the Inflation Rate Affect the Performance of the Stock Market? The Case of Egypt”. Emerging Markets Review, 2, pp. 263-79

  10. Fama, E.F. & Schwert. G. W. (1997), “Asset return and inflation, Journal of Financial Economics.” 5:115-46

  11. Spyrou, S. (2001), “Stock returns and inflation: Evidence from an emerging market.” Applied Economics Letter. 447-450

  12. P. J. Hess – B-S. Lee, (1999), “Stock Returns and Inflation with Supply and Demand Shocks”. Review of Financial Studies, 12, pp. 1203-1218.

  13. F. C. Graham (1996), “Inflation, Real Stock Returns, and Monetary Policy”. Applied Financial Economics, 6, pp. 29-35.

  14. Hardouvelis, G. A. (1988), “The predictive power of the term structure during recent monetary regimes. Journal of Finance. 43(2): 339-356.

  15. Elyasiani, E. Perera, P. & Puri, T. N. (1998), “Interdependence and Dynamic Lingkages between Stock Market in Sri Lanka and its trading partners, Journal of Multinational Financia;l Management. 8:89-101.

bottom of page