Europ. J. Econ. Bus.  DOI: http://dx.doi.org/10.20936/EJEB/160105 KEYWORDS dollar price, gold prices, sensex INTRODUCTION When we talk about the stock market the frst thing come into our mind is this is an important element of a economy because stock market plays a vital role in the growth of key sectors of the economy and that ultimately affects the economy of the country. Stock market plays the signifcant role for the industry and also for the investor who wants to invest in the stock market to gain maximum return on his savings. In India there are number of stock exchanges but two of them are very popular BSE and NSE. The primary function of any stock market is to play the role of supporting the growth of the industry and economy of the country and it is also the measurement tool that gives the idea about the industrial growth as well as the stability of the economy with their performance. The rising index or consistent growth in the index is the sign of growing economy and if the index and stock prices are on the falling side or their fuctuations are on the higher side it gives the impression of un stability in the economy exist in that country . On the other side we know that the growth of the country is directly related to the economy which consists of various variables like GDP, Foreign Direct Investment, Remittances, Infation, Interest rate, Money supply, Exchange rate and many others. These variables are the backbone of any economy. The movements in the stock prices are affected by changes in fundamentals of the economy and the expectations about future prospects of these fundamentals. Stock market index is a way of measuring the performance of a market over time. These indices used as a benchmark for the investors or fund managers who compare their return with the market return. Numerous studies conducted in USA, UK and Japan to fnd out the relationship between macroeconomic variables and the fuctuations of stock prices. The fndings of these studies show that with the minor variation these macroeconomic variables have the signifcant impact on stock prices. These results helped investors to make better predictions about the movement of stock prices whenever these fundamentals change their position. Here we consider four independent factors – sensex, gold, FII and exchange rate and their impact on Nifty . The main objectives of this study are: 1. To study the impact of gold prices on Nifty. 2. To study the impact of dollar prices on Nifty. REVIEW OF LITERATURE According to Agrawal (2010), the correlation between Nifty re- turns and exchange rates were found to be negative. Further in- vestigation into the causal relationship between the two variables using Granger causality test highlighted unidirectional relationship between Nifty returns and exchange rates, running from the for- mer towards the latter. The results of Sharma et al. (2010) reveal that there is high correlation between the empirical results reveal that exchange rate and gold prices highly effect the stock prices on the other hand the infuence of foreign exchange reserves and Infation on the stock price is up to limited extend only. Sjaastad et al. (1996) as the world gold market is dominated by the European currency bloc, appreciations or depreciations of European curren- cies have strong effects on the price of gold in other currencies. Mishra et al. (2012), the paper goes on to conclude that there has been a structural shift in the factors affecting international gold prices in 2003. Short-run volatility in international gold prices used to be traditional factors such as international commodity prices, ABSTRACT The research has been under taken to know the effect of gold prices and dollar prices on the stock exchange indices. For the purpose of study secondary data for 3 years have been collected from 2011 to 2014. Average of opening and closing price has been considered. For the purpose of data analysis multiple regression has been applied with the help of statistical software SPSS. It has been concluded that both dollar and gold prices were having positive effect on the stock market indices. ORIGINAL ARTICLE A Study on Impact of Gold Prices and Dollar Prices on Stock Market Indices with Special Reference to Sensex Nifty Vishal Geete Associate Professor, Acropolis Faculty of Management & Research, Indore, India Received: 25 April 2016 – Accepted: 24 May 2016 – Publish: 19 May 2016 * Address reprint requests to Dr. Vishal Geete, Associate Professor, Acropolis Faculty of Management & Research, Indore, India. E-mail: vishalgeete@acropolis.in; vishalgeete@rediffmail.com