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This paper explores the link between business cycles, stock market performance, and economic health in India, focusing on GDP, NIFTY, and Sensex. It highlights how stock markets mirror economic expansions and contractions, influenced by factors like unemployment, literacy rates, and trade balances. The study shows stock market indices move in sync with GDP and investor sentiment during key economic events. Cyclical industries such as Real Estate and Vehicles experience deeper declines during recessions, while defensive sectors like Healthcare and Consumer Goods remain more stable. The paper also examines government actions, including monetary and fiscal policies, such as repo rate cuts and fiscal stimulus, aimed at stabilizing markets during slowdowns. Global market comparisons illustrate how external shocks and domestic policies interact to influence market movements. Supported by case studies and data, the research stresses the complexity of the relationship between business cycles, stock markets, and economic health, calling for stronger policy interventions to mitigate downturns and promote long-term financial stability.

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An Economic Analysis of Business Cycles and Its Influence on Stock Market and National Economic Health—An Indian Perspective

  • 章节

  • 发表日期：

    2025年

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  • Mahendra Parihar,
  • Aryan Bondgulwar,
  • Tanishq Jha,
  • Tapan Patel,
  • C. C. Aiyappa

摘要

This paper explores the link between business cycles, stock market performance, and economic health in India, focusing on GDP, NIFTY, and Sensex. It highlights how stock markets mirror economic expansions and contractions, influenced by factors like unemployment, literacy rates, and trade balances. The study shows stock market indices move in sync with GDP and investor sentiment during key economic events. Cyclical industries such as Real Estate and Vehicles experience deeper declines during recessions, while defensive sectors like Healthcare and Consumer Goods remain more stable. The paper also examines government actions, including monetary and fiscal policies, such as repo rate cuts and fiscal stimulus, aimed at stabilizing markets during slowdowns. Global market comparisons illustrate how external shocks and domestic policies interact to influence market movements. Supported by case studies and data, the research stresses the complexity of the relationship between business cycles, stock markets, and economic health, calling for stronger policy interventions to mitigate downturns and promote long-term financial stability.