Impact of Macroeconomic Indicators on Listed Stocks' Price Movement: Evidence from the Nigerian Capital Market

Abstract

This study investigated the impact of key macroeconomic indicators on the price movements of listed stocks in the Nigerian capital market, with a view to understanding the extent to which macroeconomic fundamentals influence equity performance. Drawing on quarterly data from 2013 to 2023, the study focused on indicators such as inflation rate, exchange rate, interest rate, and gross domestic product (GDP) growth rate. Using an econometric approach, specifically multiple regression, the research evaluated both short and long-term relationships between the selected macroeconomic variables and the Nigerian Stock Exchange All-Share Index (NGX ASI), which served as the proxy for stock price movement. The findings revealed a significant long-run relationship between macroeconomic indicators and stock prices, with exchange rate and inflation exerting the most pronounced effects. GDP growth rate showed a positive but lagged impact on stock market performance, while interest rate exhibited a negative significance, consistent with theoretical expectations. This study contributed to the empirical literature by providing evidence from an emerging market context and offers policy implications for regulators, investors, and portfolio managers seeking to incorporate macroeconomic signals into investment decisionmaking processes.