Factors affecting stock market index volatility: Empirical study

Abstract

How is stock market price volatility affected, and what is the nature of the impact that macroeconomic variables do on the stock market price direction? The main objective of this study is to investigate the impact of some selected macroeconomic variables (inflation rate (INR), interest rate (IR), economic growth rate (EGR), and foreign investment (FI)) on Amman Stock Exchange (ASE) fluctuation for the period 1999–2018. The information is based on the annual data published by industrial companies listed at ASE. The study adopted a descriptive-analytical approach, also simple and multiple linear regression analysis was employed for the mentioned purpose (Nurfadilah & Samidi, 2017). The results revealed that there is no statistically significant impact of INR, IR, EGR, and FI collectively on ASE performance (Niewińska, 2020). Individually, the results indicated that there is a statistically significant impact of all variables (INR, IR, EGR, and FI) on ASE performance. Additionally, the results concluded that foreign investment, portrayed the highest impact factor on ASE performance, followed by a change in average interest rate, then inflation rate, and the least impact attributes to the economic growth rate. Finally, the research recommends that Jordanian banks should reduce the lending interest rate to enhance investment in securities and improve economic growth rate, also Jordanian authorities should encourage foreign direct and indirect investment and make more efforts to attract more foreign investment, either in the form of tax incentives or by extending finance at low-interest rates.

Research on the Influence of Microeconomic Factors on Stock Market Fluctuation

“…Therefore, this study pursues indepth research to reveal the internal relationship between microeconomic factors and stock market volatility. This paper determines the influence degree and direction of different microeconomic factors on stock market fluctuation, which will help us understand the relative importance of different factors in market fluctuation [3]. Explore the possible relationships and interactions between these factors.…”

Impact of GDP and Inflation on Stock Market Performance in Nepal and Sri Lanka: A Comparative study of NEPSE and CSE index

“…However, there might be the other variables which might affect stock exchange. Some of the variables influence stock exchange that can be interest rates, dividend, PCI, FDI, foreign exchange and remittance (Al-Rimawi & Thair, 2021). The study used secondary data of closing stock of 25 fiscal years from 1997 to 2021.…”