Relationship Among Stock Market Index and Macroeconomic Indicators: An Empirical Analysis of Post-pandemic Era

There exists a strong correlation between fluctuations in stock prices and the financial and economic circumstances of a nation. Being a fundamental component of stock market analysis, the stock index serves a crucial function in defining the general direction of the stock market, offering a benchmark for market risk, and fostering market confidence. In the post-pandemic era, with the recovery of the stock market and the national economy, whether the connection between macroeconomic indicators and the stock market has changed or not has become an important research topic. The study gathered monthly data from 18 countries characterised by varying degrees of development, geographical location, and cultural heritage throughout the period following the epidemic (January 2023 to June 2024)This study explores the relationship between typical macroeconomic indicators and stock market indexes worldwide. Using the concepts of addition and weighting, this study sorts the degree of closeness between these indicators and the stock index, which enables future researchers to effectively choose suitable macroeconomic indicators by consulting this paper while analysing the stock market. The rank of closeness degree is based on the unemployment rate, exchange rate, inflation rate, and interest rate. Finally, VIF and significance before and after dimensionality reduction were compared to prove the effectiveness of ranking.