Analysing the Impact of Macro-Economic Indicators on Stock Valuations: An Empirical Study of Selected Companies

Abstract

This study delves into the relationship between key economic factors and their impact on the share price behavior of selected companies across different market capitalizations. Focusing on the period from 2014 to 2021, it examines the influence of major economic indicators such as Gross Domestic Product (GDP), Inflation Rate (IR), Foreign Institutional Investment (FII), Exchange Rate (ER), Index of Industrial Production (IIP), and Crude Oil Price (COP) on the Market Price Per Share (MPS) of these companies. The research employs a mixed-method approach, integrating both correlation analysis and multiple regression, to assess the varying effects of these economic factors on large, medium, and small cap companies. The findings reveal a nuanced landscape: while certain economic factors significantly influence the MPS of some companies, their impact varies across different companies and market capitalizations.