Assessing the Impact of Geopolitical Risk Index in Volatility of Nifty-50

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Vikas Verma, Khushbu Verma, Arjun Yadav, Junaid Ahmed

Abstract

This research paper explores how political uncertainties around the world affect the volatility of India's Nifty 50 stock index. Since there's not much research on this topic in the context of India, this paper aims to fill that gap. The study uses a Dynamic Conditional Correlation - Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) model to analyse the relationship between a Geopolitical Risk Index (GPRI) and the Nifty 50 index. By looking at data over a specific period, the paper gives us insights into how global political tensions impact the Indian stock market. This information is essential for both investors and policymakers, helping them understand how external political factors can influence India's financial markets. The paper concludes by discussing the implications of these findings for future research and practical uses, like guiding investment strategies and economic policies. Overall, this research contributes to understanding how global politics and financial markets interact, especially in emerging economies like India.

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How to Cite
Vikas Verma, Khushbu Verma, Arjun Yadav, Junaid Ahmed. (2025). Assessing the Impact of Geopolitical Risk Index in Volatility of Nifty-50. European Economic Letters (EEL), 15(1), 846–852. Retrieved from https://www.eelet.org.uk/index.php/journal/article/view/2459
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