The Macroeconomic Variables Impact on Pakistan Stock Prices: Empirical Evidence from Pakistan Stock Market
The study evaluated the impact of macroeconomic factors on Pakistan stock prices. The study specifically looked at how the money supply, interest rates, exchange rates, and inflation rate affected stock prices. To demonstrate a causal link between variables, the study used a causal research design. The study collected monthly data from 2010 to 2025. Descriptive statistics and the gathered data were analyzed using multiple regression analysis. The results have shown that both the exchange rate and the money supply had positive and statistically significant impacts on stock prices. The coefficients for these components were 0.089 (p= 0.051) and 0.264 (p= 0.001) correspondingly, showing that higher stock prices are linked to rises in both parameters. The results also demonstrated that the interest rate had negative, statistically significant impacts on stock prices. These findings imply that a shock rise in one or both economic variables is positively correlated with higher stock market values, demonstrating that money supply and the exchange rate have a positive and negligible impact on stock prices. By combining the Efficient Market Hypothesis, Purchasing Power Parity, Arbitrage Pricing Theory, and Monetarist Theory, this work offers a theoretical contribution that explains the complex link between macroeconomic factors and changes in stock prices.
Authors
- Omar Abdulmohsin Ali (ORCID: https://orcid.org/0000-0003-0274-9325)
- Muhammad Makkey Bhutta (ORCID: https://orcid.org/0000-0002-4334-1310)
- Muhammad Jamal Khan (ORCID: https://orcid.org/0000-0003-0168-3547)
- M. Raquibuz Zaman
- Khan Zaman Khan
Institutions
- University of Sargodha (PK)
- Islamia University of Bahawalpur (PK)
- National Treasury (ZA)
- Institute of Business Management (PK)
- Islamic University of Madinah (SA)
- University of Agriculture Faisalabad (PK)
Publication Details
- Journal
- The critical review of social sciences studies
- Published
- 2025-06-20
- DOI
- https://doi.org/10.59075/ckrbmh87
- Citations
- 1
- Primary Topic
- Islamic Finance and Banking Studies
- Type
- article
- Field-Weighted Citation Impact
- 3.91