Global Macroeconomic Forces and Stock Market Performance: Evidence from a Developing Economy

Abstract

This study investigates the impact of global macroeconomic indicators, namely gold prices and the USD exchange rate, on the performance of the Nepal Stock Exchange (NEPSE) from 2015 to 2025 (August). Using monthly secondary data, the study applies correlation and multiple linear regression analyses through SPSS to examine their relationships. The findings reveal that gold prices have a significant positive influence on NEPSE, while the USD exchange rate shows an insignificant effect. This indicates that gold plays a more dominant role in shaping investor sentiment and market performance in Nepal. The study concludes that NEPSE is more responsive to global commodity trends, particularly gold, than to currency fluctuations. It recommends that policymakers and investors closely monitor global gold movements, promote financial awareness, and diversify investment strategies to strengthen market stability and long-term growth in Nepal’s capital market.