Impact of Macroeconomic Indicators on Selected Commodity Futures- Evidence from Indian Derivatives Market

Abstract

Derivatives are one of the most innovative financial instruments which help the market participants in eliminating the price risk. Earlier commodity derivatives were considered to be an old concept but recently it got updated with a new face into price risk management. In India, at the initial stage, index-based derivatives were introduced in the securities market and then followed by commodities periodically for the enhancement of the markets and the price realization. At present in India, 21 commodity futures exchanges are actively being traded. Besides, a well-functioning of derivatives market facilitates the economic growth of the nation and consequently increases capital formation.