2023, Vol. 6, Issue 1

The share market is a vital component of every nation's economic structure. It is crucial to the prosperity of any nation. In doing so, money is moved from savers to debtors. The stock market is referred to as a gauge of a nation's economic health. Any change in the stock market has a direct impact on the national economy. Any nation can flourish and prosper if the stock market operates well. Any country's stock market should be effective for its economy to thrive. Numerous researches have been conducted on the Indian stock market and on macroeconomic factors like GDP. This study focuses on monthly data between January 1, 2011, and December 31, 2020 to determine the link between the GDP and the BSE SENSEX. This study makes use of the Granger causality test and Johansen's co-integration test VAR model. According to the findings, there is a causal association between the GDP and the BSE SENSEX. Unidirectional causality exists. Any adjustments to GDP will impact the BSE SENSEX (stock market). The policy formulation benefits from this link.