Macroeconomic Indicators and Volatility in Banking Sector

The dynamic relationship between macroeconomic factors in India and the stock returns of the NSE Nifty Bank index is examined in this study. The banking sector plays a preliminary role in monetary policy for economic stability which is sensitive to the macroeconomic fluctuations. This research employs time series data from January 2020 to December 2024, to analyse the Nifty Bank Index returns against select macroeconomic factors. The variables include the inflation rate, interest rates, exchange rates and GDP. The methodology uses econometric techniques such as Unit Root tests to check for stationarity, Ordinary Least Square regression model to check the positive negative effect. The empirical findings reveals that the NSE Nifty bank stock returns to macroeconomic highlights the economic policy. It emphasizes the need for adding these factors into the bank stock returns and offers values for investors to invest in the market.