The Empirical Study Of The Relationship Between China's Macro-economic Variables And The Stock Market

The stock market is a natural product of a certain level of economic development entities.An effective operational status of the stock market reflects the development of the real economy to some extent. An effective stock market is a leading indicator of a country's macroeconomic,it has an important role in guiding on a country's macroeconomic development of effective policies and promoting the development of the country's real economy when grasping the stock market running effectively.In addition, the macroeconomic's impacts on the stock market is also very large. Any emerging new stock markets around the world are inseparable from macro-economic interferences. Countries also need to control the macroeconomic to regulate the operation of the emerging stock market, ensuring a development healthy market. China's stock market is an important part of socialist market economy. the Shanghai Stock Exchangging market officially opened in the December 19,1990,which marks the chinese securities market concentration tangible beginning of the operation. In ten short years after the development process of wind and rain in our country, Shanghai Stock Exchangging market moved forward in he difficult and tortuous and its position in the national economy is increasingly important.China's stock market has just started, to a certain degree of macro-control needed to guide the country through the stock market, but the country's macro-control can not be too blind. You must learn the relations between our domestic stock market and the major macroeconomic indicators before regulaton.It is necessary to analyze the overall macroeconomic impact on the stock market, and also examine each of the major macroeconomic variables influence on the stock market to study the macroeconomic effects of major variables and the way the stock market mechanism, thereby effectively predict and guide the stock market on the macroeconomic environment to respond.In this paper,after we determining the specific statistical methods, firstly we use the Shanghai Composite Indexs from January 1999 to June 2010 which is monthly closing data and macroeconomic variables indexes of the monthly data during the corresponding period (including the total industrial added value growth rate, the consumer price index, interest rates,money supply and the first index and 30 specific indicators of macroeconomic variables), make factor analysis for the indices of the 30 variables to identify several aspects of the economy which the control variables of the 30 common factors as the overall macro-study, and then obtained the relationship between the Shanghai Composite index and everal common factors through the empirical study, and further obtained the following main conclusions:Firstly,in the general long-term impact of macro-economic relations on the stock market, interest rates will make the stock market raising the level of reverse run, while the total level of macro-growth, increasing inflation and the overall level of the public optimistic about the economy will have conducive to a positive stock market volatility; but the impact in the short term relationship, the increase in short-term interest rates will make positive changes in the stock market, and short-term inflation increases, the total level of macroeconomic growth and the general public on the economy in the short term optimistic about the health of the stock market would make negative changes.Then in the long term the selected major macroeconomic variable on the stock market influence, industrial added value of the growth of the stock market growth will reverse the change in the bank engages in inter-bank lending, the weighted average rate of increase will be made of stock prices, fiscal balance of payments of the stock market will take to change, the consumer price index increased cause of the share price index down, consistent with the first changes were positive impact on the index of the share price changes;but in the short term, the major macroeconomic variable on the stock market influence are not very clear.Generally speaking, the conclusion mentioned about the relationship between the macroeconomic and the stock market meets the Theoretical explanations which is mentioned in this article.