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Abstract
This study investigated the impact of key macroeconomic variables on stock market performance in Nigeria over the period 1990 to 2023. Specifically, the study examines the influence of inflation rate, unemployment rate, GDP growth, interest rate, exchange rate, and crude oil prices on stock market capitalization, which serves as a proxy for market performance. Employing the Fully Modified Ordinary Least Squares (FMOLS) technique well-suited for addressing cointegration and correcting for endogeneity and serial correlation, the study found that inflation has a positive and statistically significant effect on stock market
performance, while unemployment exerts a significant negative impact. In contrast, GDP growth, interest rate, exchange rate, and crude oil price exhibit statistically insignificant effects. These results suggest that while some macroeconomic indicators directly influence market performance, others may be mediated through structural and institutional factors. The study recommended targeted inflation control, employment generation, economic diversification, and coordinated macroeconomic policy reforms to strengthen the responsiveness of Nigeria’s stock market to economic fundamentals.
performance, while unemployment exerts a significant negative impact. In contrast, GDP growth, interest rate, exchange rate, and crude oil price exhibit statistically insignificant effects. These results suggest that while some macroeconomic indicators directly influence market performance, others may be mediated through structural and institutional factors. The study recommended targeted inflation control, employment generation, economic diversification, and coordinated macroeconomic policy reforms to strengthen the responsiveness of Nigeria’s stock market to economic fundamentals.
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