Exploring Macroeconomic indicators Influence on Capital Market Performance - A Cross-BRICS Analysis.

Abstract

This study investigates the relationships between key economic indicators and stock market indices in the BRICS countries (Brazil, Russia, India, China, and South Africa) over more than ten years, utilizing regression analysis and correlation studies. Data from 1997 to 2022 were collected from sources such as www.macrotrends.net,www.finance.yahoo.com, www.worldbank.org,  www.wsj.com, www.tradingeconomics.com and www.cnbc.comand analysed using SPSS Version 25. The study focuses on the BSM, MOEX, BSE, SSE, and JSE indices, employing annual time series data and closing prices for each fiscal year. It's important to note that while this analysis specifically addresses GDP, inflation, and interest rates, other factors are not considered. The findings indicate that GDP, inflation, and interest rates significantly influence the stock market indices, explaining a substantial percentage of their variations: 68.2% for BSM, 78.9% for MOEX, 94.9% for BSE, 77.4% for SSE, and 79.3% for JSE. GDP consistently exhibits a positive correlation with stock indices across all countries, suggesting synchronized economic growth and market performance. However, the relationships between inflation, interest rates, and stock indices vary among the BRICS nations. Regression analysis underscores GDP as a significant predictor for stock indices, while the impacts of inflation and interest rates vary across countries. These insights provide valuable information for investors, policymakers, and scholars, enriching our understanding of the economic dynamics within the BRICS nations.