NIFTY Index Performance: An Empirical Correlation Analysis

Abstract

This study examines how macroeconomic factors such as Gross Domestic Growth and inflation affect the movement of the NIFTY index for the last 10 years from the data to 2014-2024. Using the Pearson correlation coefficient, an analysis was performed to understand the direction and magnitude of these variables. Quarterly data have been included in the study, and analysis reveals inconsistent but occasionally significant correlations, indicating that while macroeconomic variables influence NIFTY movement, the nature and strength of the influence vary over time. It was found that these macro factors affect NIFTY to some level, but the relationship is neither stable nor uniformly predictive. These findings offer insights for investors and policymakers, as well as future research options, such as adding more macro factors and scope for predicting the values for the next ten years.