scholarly journals The price of the lockdown: The effects of social distancing on the Indian economy and business during the COVID-19 pandemic

2021 ◽  
Vol 23 (1) ◽  
pp. 85-99
Author(s):  
Hasnan Baber ◽  
Rao Tripati
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Stock Prices ◽  
Economic Activity ◽  
International Travel ◽  
Business Activity ◽  
Religious Activities ◽  
Social Distancing ◽  
The Exchange Rate ◽  
The Impact

The decision on immediate lockdown in India put economic, social and religious activities to a grinding halt. The paper examines the impact of the lockdown and social distancing policies on economic activities in India, using a multivariate econometric model for the data collected in the period from 1st January to 31st August 2020. While the social distancing policy is captured in terms of internal movement, domestic travel and international travel restrictions, its effect on the economic activity and the business activity is captured through stock prices, purchasing managers' index and the exchange rate. Confirmed COVID-19 cases and related deaths are also used as the independent variables. The results reveal a significant negative impact of social distancing policies on the economic activity and the business activity, the stock market and the exchange rate. Furthermore, the economic stimulus provided by the Government could not bring a positive influence on the stock market.

scholarly journals How Does Financial Sector Reacts After Special Events? An Event Study Analysis of Tunisia after the Revolution of 2011.

2014 ◽  
Vol 4 (2) ◽  
pp. 584-599
Author(s):  
Amira KADDOUR ◽  
Mourad ZMAMI
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Event Study ◽  
Banking Sector ◽  
Financial Sector ◽  
Study Analysis ◽  
Special Events ◽  
Egarch Model ◽  
The Exchange Rate ◽  
The Impact

Using an event study analysis, we aim to investigate the impact of political, economic, social and terrorism events, on the Tunisian financial sector, over the period of the Tunisian Revolution; from (12)2010 to (04)2014. Based on a daily data analysis using three selected variables ; Sectoral index of performance of Tunisian banks ,Index of Tunisian stock market and the exchange rate Euro/ Dinar,  the EGARCH model results have highlighted that general events decrease the return of our variables, and increase their volatility. More, results have shown that stock market is very sensitive to political and terrorism events, bad economic events increase the volatility of the exchange rate, and decrease the performance of banking sector. Political events remain the more important component, they affect negatively all the endogenous variables; coefficients in the mean equation show an important decline in term of the return of banking sector ,the stock market and the exchange rate.

scholarly journals The Stock Market and Exchange Rates in Five South Asian Countries

2017 ◽  
Vol 18 (1) ◽  
pp. 102 ◽  
Author(s):  
Firmansyah Firmansyah ◽  
Shanty Oktavilia
Keyword(s):  
Exchange Rate ◽  
Financial Crisis ◽  
Stock Market ◽  
Exchange Rates ◽  
Stock Returns ◽  
Stock Prices ◽  
Stock Return ◽  
The Philippines ◽  
Short Run ◽  
The Exchange Rate

The composite price index and return of stocks are the important indicators, both as a measure of the company's portfolio performance, as well as an indicator of macroeconomic health and the aggregate investment. In addition, the stock prices are also influenced by macroeconomic variables and one of the most important is the exchange rates. The objective of this study is to determine the behavior of exchange rate affects the stock returns in Southeast Asia, pre and post of the 2008 world financial crisis. By employing the daily stock market return in Indonesia, Malaysia, the Philippines, Thailand, and Singapore more than seventeen years from 1 September 1999 to 31 March 2017, this study utilizes Engle-Granger error correction model and cointegration approach to investigate and compare the long and short run of the structural effect of the exchange rates on stock returns. To differentiate the behavior of variables between pre and post occurrence of 2008 world financial crisis, the estimation of the model is divided into two periods. This study finds that the exchange rate growth influence the stock returns in the long and short run, and proves that the cointegration between the two variables exist in all countries. The study has the implication that the exchange rate, which the one of the fundamental measures of a country's macroeconomic health, is an important determinant of influencing stock return, even its effects are responded by the stock return in one day.

scholarly journals Macroeconomic Influence on the Nepalese Stock Market

2019 ◽  
Vol 31 (1) ◽  
pp. 47-64
Author(s):  
Mukti Bahadur Khatri
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Money Supply ◽  
Stock Prices ◽  
Economic Activity ◽  
Direct Investment ◽  
Negative Relationship ◽  
Short Run

This study examines the dynamic relationship among the stock market and macroeconomic factors such as nominal domestic variables (inflation, money supply, and interest rate), real economic activity (gross domestic product) and foreign variable (exchange rate and foreign direct investment) of Nepal. It has used Johansen and Juselius (1990) method of multivariate cointegration for the period Mid-July 1994 to Mid-July 2015. The finding of this study shows that the stock prices are positively and significantly related to money supply. Real economic activity and interest rate have insignificant and negative relationship with the stock prices. Similarly, foreign direct investment, inflation (CPI) and exchange rate with US dollar have a positive and insignificant relationship with the Nepalese stock market. Accordingly, the VEC estimates suggest that there is no significant effect of macroeconomic variables to the Nepalese stock price in the short run. In general, the presence of cointegration and causality suggest that Nepalese stock market is not efficient in both the short run and the long run.

scholarly journals Economic Growth: How Inflation and the Exchange Rate Work Through the Stock Market as a Mediating Variable

2019 ◽  
Vol 9 (4) ◽  
pp. 197
Author(s):  
Vietha Devia SS
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Stock Market ◽  
Exchange Rates ◽  
Stock Exchange ◽  
Path Model ◽  
Analysis Tool ◽  
The Exchange Rate ◽  
The Impact ◽  
Research Period

This study aims to investigate the impact of inflation and the exchange rate on economic growth through the stock market as a mediating variable. The analysis tool used a path model with monthly data. The research period lasted for 14 years from 2004 to 2017. The data was obtained from the Central Statistics Bureau, Bank Indonesia and Jakarta Stock Exchange. Case studies were conducted in Indonesia and the researcher took the Consumer Goods Index as a variable in the stock market. The results show that inflation and the exchange rates do not significantly affect economic growth through the stock market. Alternatively, the stock market is not an excellent mediating variable between inflation and the exchange rate on economic growth. The size of the stock market and the awareness of domestic investors when accessing the stock market is thought to be the factors that influence how the inflation and exchange rates work.

Economic Activities and Oil Price Shocks in Indian Outlook: Direction of Causality and Testing Cointegration

2021 ◽  
pp. 097215092199049
Author(s):  
Preeti Sharma ◽  
Avinash K. Shrivastava
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Stock Prices ◽  
Economic Activity ◽  
Negative Relationship ◽  
Oil Prices ◽  
Industrial Output ◽  
Market Prices ◽  
Macroeconomic Variables ◽  
Short Run

The current study intends to find out the linkages between crude oil prices and economic activity in the context of Indian economy. The macroeconomic variables such as gross domestic product (GDP), unemployment, industrial output, inflation, exchange rate and stock market prices have been used as a proxy to economic activity. We have analysed the sample data of 30 years, that is, from year 1991 to 2020. To inspect the short-run relationship between oil prices and the above-mentioned macroeconomic variables, Granger causality test has been applied after removing the presence of unit root through differencing the series. To investigate the long-run relationship, vector error correction model (VECM) has been applied after testing cointegration through the Johansen method of cointegration. The findings of the study show that oil prices have short-run causality with all the variables, that is, GDP, unemployment, industrial output, inflation, exchange rate and stock market prices, while they have a long association with inflation, industrial production and unemployment. Further we find a negative relationship between oil prices and unemployment, industrial output, inflation and exchange rate and a positive relationship with GDP and stock prices.

scholarly journals Impact of Macro - Economic Factors on Indian Stock Market- A Research of BSE Sectoral Indices

2019 ◽  
Vol 8 (2S7) ◽  
pp. 597-602
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Crude Oil ◽  
Stock Prices ◽  
Gold Price ◽  
Oil Price ◽  
Economic Factors ◽  
Crude Oil Price ◽  
The Impact

Macro-Economic factors plays a major role in decision making. Evaluation of macroeconomic environment is required to examine the behaviour of stock prices, which further influences the investor’s investment behaviour. Even though some macro-economic factors are not directly related to the company or industry, but those factors has an impact on stock prices, further economic activity in the domestic and global level has its own impact on stock market. When economy of the country grows hastily, it leads to faster growth in the industry and vice versa. Financial market plays a central role in the performance of financial system of an economy. Stock market is a market where securities of listed companies are exchanged between different investors, it is very responsive market which, gives a stage to investors to invest their money in various securities. Market indices are the tools to measure the performance of various securities of stock market and Investors make use of those market indices to analyse performance of those industries in which, they prefer to invest. This study takes into account six macro-economic factors (Crude oil Price, Gold Price, Silver Price, Exchange Rate, Inflation and Interest Rate) to study & analyse the impact of these variables on selected sectoral indices at BSE, SENSEX, S&P BSE BANKEX, S&P BSE Oil and Gas, S&P BSE Capital Goods, S&P BSE Consumer Durables, S&P BSE Reality, S&P BSE PSU and S&P BSE Power. The study shows that gold price, exchange rate, consumer price index and interest rate are positively correlated with four indices but crude oil price and silver price have positively correlated with 3 indices. So from the result it is clear that investor need to take of all the variables for their investment decision and the investment banker also take care of these indicators before giving suggestion to their clients

The Relation between National Stock Prices and Effective Exchange Rates: Does It Affect Exchange Rate Exposure?

2015 ◽  
Vol 15 (2) ◽  
pp. 241-256 ◽  
Author(s):  
Marko Korhonen
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Exchange Rates ◽  
Stock Prices ◽  
Risk Sharing ◽  
International Risk Sharing ◽  
Exchange Rate Exposure ◽  
Effective Exchange ◽  
The Exchange Rate ◽  
Cointegration Relationship

There is twofold contribution in this paper. First, by using monthly data for 16 industrialized countries for the period 1973–2011 we find evidence of time-varying cointegration relationship between effective exchange rates and national stock market indices. Second, we present that the cointegration relationship affects exchange rate exposure. We propose that the exchange rate exposure effect changes when the connection between the exchange rate and stock market emerges. This is a new result and reflects importance of these markets’ joint role in international risk sharing.

scholarly journals Analysis of the Impact of Fiscal and Exchange Rate on Growth: Lithuanian and Polish Case

Ekonomika ◽  
2004 ◽  
Vol 68 ◽  
Author(s):  
Philippe Grainville
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Economic Activity ◽  
Price Stability ◽  
European Policy ◽  
Policy Mix ◽  
Baltic States ◽  
The Exchange Rate ◽  
The Baltic ◽  
The Impact

The implementation of the EMU translates a new European policy mix. Our article proposes a study on the coordination of the monetary and budgetary policies for the Baltic States for their complete integration in the European policy mix. New members must ensure a monetary policy able to answer the objective of price stability; they take part in EMS II for three years.The budgetary sovereignty of governments is relative taking into account their obligations in accordance with the Pact of Stability and Growth. After the participation in the Monetary Union. the countries cannot change their exchange rate, they will loose weapon of the exchange rate and will have henceforth only the budgetary and fiscal policies to adjust their economies. These last are in addition limited by the criteria of convergence and the Pact of Stability and Growth.Credibility can be obtained only by affecting to each authority a specific objective, namely the price stability for the monetary authority and the soutenability of the national debt for the budgetary authority.A not balanced policy mix encourages financial turbulences, which occur when the investors have doubts as to the capacity of the country to absorb a shock (for example, in Russia). Budgetary deficit can reach a significant level. The monetary supply which can finance the deficit is then higher than the demand.According to monetarists, the budgetary discipline is associated with a partial control of prices and wages. In Poland, the “popiwek”, which is a tax on the increases in wages, attempts to reduce the budgetary deficit. Such a policy of freezed prices and wages is able to produce a fast deceleration of inflation. The public accounts thus tend to improve quickly.For monetarists, the monetary policy does not have any influence on the real sphere. The entry in the EMU supposes the loss of the exchange rate. The adjustment of the economic policy for the Member States in the event of asymmetrical shocks can be done only by the tax and budgetary policies. The latter are indirectly forced by the respect of the criteria of restoration of public finances; in the Central European East countries these problems are significant.In the current context of slowdown in economic activity, several governments of the Euro zone asked the European Central Bank to lower their rates to support the economic activity. Within this framework, we will study the impact on the growth of this new policy mix to which the Baltic States and Poland will be subjected.

scholarly journals Impact of Oil Price Shocks and Exchange Rate Volatility on Stock Market Behavior in Nigeria

2016 ◽  
Vol 7 (2) ◽  
pp. 171 ◽  
Author(s):  
Adedoyin I. Lawal ◽  
Russel O. C Somoye ◽  
Abiola A. Babajide
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Exchange Rate Volatility ◽  
Price Volatility ◽  
Oil Price ◽  
Market Volatility ◽  
Stock Market Volatility ◽  
Oil Price Volatility ◽  
The Exchange Rate ◽  
The Impact

The impact of exchange rate and oil prices fluctuation on the stock market has been a subject of hot debate among researchers. This study examined the impact of both the exchange rate volatility and oil price volatility on stock market volatility in Nigeria, so as to guide policy formulation based on the fact that the nation’s economy was foreign induced and mono-cultured with heavy dependence on oil. EGARCH estimation techniques were employed to examine if either the volatility in exchange rate, oil price volatility or both experts on stock market volatility in Nigeria. The result shows that share price volatility is induced by both the exchange rate volatility and oil price volatility. Thus, it is recommended that policymakers should pursue policies that tend to stabilize the exchange rate regime on the one hand, and guarantee the net oil exporting position for the economy, that market practitioners should formulate portfolio strategies in such a way that volatility in both exchange rates and oil price will be factored in time when investment decisions are being made.

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