2024, Vol. 7, Issue 2

author(s)
KV Dinesh Kannaa and N Arunachalam

abstract
This research looks into how interest rates relate to stock market performance in India, specifically examining how changes in the call rate—the rate at which banks lend to one another—affect the returns of the BSE SENSEX. In emerging markets like India, the central bank's decisions, particularly regarding interest rates, have a big impact on economic activities that influence stock prices, consumer spending, and business investments. The Reserve Bank of India (RBI) is key in tweaking interest rates to manage inflation and encourage economic growth. Fluctuations in interest rates can change borrowing costs for companies, sway investor confidence, and affect various sectors, ultimately influencing the overall market landscape. This study uses statistical techniques like correlation and regression analysis to assess how shifts in interest rates impact the stock market over a specific timeframe. By examining these connections, the study provides important insights for investors, policymakers, and businesses, improving their comprehension of the implications of interest rate adjustments in India's rapidly evolving economic environment.