Macroeconomic Determinants of Share Prices: A Comparative Study of Banking and Insurance Sector in Nepal

Abstract

The relationship between share price and various macroeconomic variables has remained inharmonious. The study analyzed, the selected macro-economic variables mainly risk free rate, consumer price index, dollar rate, remittance, international oil price, and money supply affecting banking and insurance sector share prices over the period of 8 years. The study supported the

evidence that the selected determinants have little effect on NEPSE index and sub-index and revealed that the selected macroeconomic variables are independent series although there are indication of some causality relationship with some of the variables.