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Capital markets may be defined as a system that brings together those who need funds with those who have fund surpluses; a system that consists of banks, investment trusts, intermediaries, and supporting institutions that enable the exchange of funds between them. As a supporting institution, stock markets enable the trading of assets such as stocks and bonds to help companies in need of funds to supply cheap and long-term funds (Ceylan and Korkmaz, 2015, p. 410). Therefore, the status and operation of a stock market, as well as the factors that may influence the stock market, are closely monitored by large groups, and conclusions are reached to provide decisions about the economy in general and the investments to be made. Research has indeed shown that stock markets or stock market indexes may be macroeconomic factors summarizing the status of national economies. As stock indexes are an indicator of the changes experienced in an economy, stock markets are defined as the barometer of economic development as well (Bhattacharjee and Das, 2021, p. 1).
Macroeconomic factors affecting the changes in stock market indexes or stock prices have long been an interesting subject around the world for those studying the science of finance and economy as well as investors and the public in general. According to a review of the literature, the relationship between stock prices and the macroeconomic factors that are considered to be influencing them has been studied by different countries at different times, including studies by Muradoglu et al. (2000), Flannery and Protopapadakis (2002), Mukherjee and Naka (1995), Chen et al. (1986), Wang (2020), Wang and Li (2020), Gunsel and Cukur (2007), Ibrahim (2003), Hashemzadeh and Taylor (1988), Lee (1992), Geske and Roll (1983), Yilmaz et al. (1997) and Poon and Taylor (1991).
It is essential to find out the main variables that influencing the stock indexes or prices. It is thought that especially changes in macroeconomic factors may cause a change in stock prices. Understanding the effect of macroeconomic factors on stock prices is significant for decision makers, investors and policy makers with regards to portfolio management and more efficient usege of resources.
According to the efficient market hypothesis stated in a study conducted by Fama (1970), the stock prices include all available data. Thus, it is accepted in general that the changes in macroeconomic factors may be reflected by stock prices (Kraft and Kraft, 1977, p. 417; Chen et al., 1986, p. 383; Jareno and Negrut, 2016, p. 325).
Stocks are known as risky assets. The total risk faced by an investor investing in a stock consists of two parts. The first of these is systematic risk and the second is an unsystematic risk (Sayılgan, 2017, s. 585). The following formula (Ceylan and Korkmaz, 2015, p. 575) shows how to calculate the total risk of both systematic and unsystematic risks:
(1): total risk of the stock: systematic risk sensitivity: systematic risk: systematic risk