Correlation between macroeconomic, financial variables and stock market: empirical evidence from Saudi stock exchange

Abstract

This paper examines the impact of macroeconomic, financial variables and the stock market in Saudi Stock Exchange. For this purpose, macroeconomic, financial variables, and Saudi stock index were analyzed for the period of 2000 to 2018. The variables were: Imports, Exports, Listed domestic companies, Foreign direct investment, GDP, Broad money, Inflation rate, and Tadawul stock index (TASI). Correlation was used to capture the relationship. The study showed strong relationships between IMP-GDP, IMP-EXP, IMP-LD, IMP-BM, GDP-EXP, GDP-LD, GDP-BM, and LD-BM while TASI has weak relationship with the financial and economic variables.