. Obianuju O. Nnadozie

This study analyzes the relationship between macroeconomic variables and stock market performance in Nigeria from 1985 to 2022, emphasizing the connections between stock market performance (SMP) as measurred by All-Share index, Gross domestic product (GDP), inflation (INFL), and exchange rate (EXR). Control variables used in this study are total government expenditure (TGE) and interest rate (INTR). The study applies the Autoregressive Distributed Lag (ARDL) methodology to explore both the short-term and long-term dynamics among these variables. The ARDL Bounds co-integration test validates a long-term relationship among the variables, supporting the use of ARDL analyses. The findings indicate that GDP has a significant positive impact on SMP in both the short term and long term, suggesting that economic growth enhances investor confidence and market performance. In contrast, inflation and exchange rate was found to be negative but insignificant. The study concludes GDP significantly affects stock market performance and that implementing effective economic policies to promote GDP growth, is vital for cultivating a strong stock market environment in Nigeria. These findings enhance the understanding of the relationship between macroeconomic variables and stock market performance, offering important insights for both policymakers and investors.