A study of cause and effect relationship between Inflation and Bombay Stock Exchange (Sensex)
European Journal of Molecular & Clinical Medicine,
2020, Volume 7, Issue 4, Pages 1023-1026
AbstractIndian stock market is the barometer of the Indian economy. The stock promote is impacted by various economic factors and Inflation is one of them. The study established the cause and effect relationship of the Inflation i.e. Consumer Price Index and the Bombay Stock Exchange index Sensex. The month wise data for the research has been taken from January 2017 to December 2019 for CPI (Consumer Price Index) and the Sensex returns. Unit root test outcome stated that the data is stationary, and the cause and effect relationship was found by the Granger Causality experiment. The outcome of the test states that there does not exist a cause and effect connection among the inflation & the Sensex proceeds.
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