Macroeconomic Variables impact on Stock Prices in a BRIC Stock Markets: An Empirical Analysis

The study investigates the nature of the causal relationships between stock prices and the key macro economic variables in BRIC countries. The empirical evidence shows that long-run and short-run relationship exists between macro economic variables and stock prices, but this relationship was not consistent for all of the BRIC countries. The policy implication of the above is that the BRIC stock markets are not responsive to changes in a majority of macroeconomic factors in spite of the sizable proportion of stock market capitalization as a share of the country’s GDP.