A Study On The Interest Rates And Stock Prices: Evidence From Indian Stock Exchanges

Abstract

Stock markets are one of the sources of finance for corporate sector to access permanent or long term capital from corporate view and one of the investment plat form which offers high returns and risk to the investors. In the present study, interest rates are independent variable and Nifty 50 and Bank Nifty as returns as dependent variables. The study period consists of ten years i.e. 2013-2014 to 2022-2023 and 120 months. RBI monitored monetary policy and interest rates 60 times during this ten years, it changed interest rates nearly 36 times and 24 times kept unchanged. The study adopted descriptive statistics (mean, minimum, maximum and standard deviation), correlation and regression statistics. The statistical result supported alternative hypothesis and result null hypothesis, which implied that change in bank rates have singnificant negative correlation between change in bank rate (CBR) and Nifty returns (NFR) and nifty bank returns (NBR) during the study period.