The Impact of Exchange Rate Fluctuations on Indian Stock Market

AUTHOR
Nitin Tanted *
Kanak Agarwal **

KEYWORDS
Financial Market, Exchange Rate fluctuations, Indian Stock Market, Economy.

ABSTRACT
The exchange rate market and stock market are two main financial markets and play a key role in international business all over the world. The interconnection between exchange rate and Indian stock indices is considered an important factor as to forecast the growth and development of Indian economy.This paper focuses on the impact of exchange rate fluctuations on Indian stock market volatility by assessing the Indian rupee rates in dollar terms (₹/$) on Nifty 50,S&P BSE BANKEX, IT INDEX and S&P BSE SENSEX.The data collected for period of study was yearly data of closing prices of ten years i.e., from the year 2010 to 2021. Several statistical tools were applied to measure the impact and association of exchange rate fluctuation on Indian stock market indices by using Correlation, Regression analysis and ANOVA model. From the analysis and results part, we came to the conclusion that there is a very weak and negligible impact of exchange rate (INR/USD)on Indian stock market indices and both the variables are self-regulating of each-other. The main aim of this study is to guide investors, financial managers and analysts to analyse the market trends, to invest with minimum risk and to compare the returns to specific investments.