Research On The Impact Of Market Rate On The Valuation Of China A Share Market

As the price of capital market capital,market interest rate is an important indicator of capital market and plays an important role in optimal allocation of capital market capital.Theoretically speaking,the adjustment of the market interest rate will have a great effect on the valuation of the stock market.If the market interest rate is raised,the stock market valuation will decline,and vice versa.However,the effectiveness of the market interest rate on the stock market has many controversies in academia.Based on the theory of stock valuation of listed companies,this paper studies the influence of market interest rate on the valuation of A-share market.Empirical tests of market interest rate and A-share valuations using unit root test,cointegration test and Granger causality test show that,Term relationship between Shanghai A-share market and the Bank of Shanghai inter-bank deposit interest rate between the two long-term stable equilibrium exists between the Shanghai A-share market,the overall price-earnings ratio and the Shanghai Interbank Rate between the two The relationship is in the opposite direction.The result is in line with the theoretical analysis.That is to say,the market interest rate has an inverse relationship with the stock valuation.Moreover,the inter-bank interest rate of Shanghai Bank can cause the price-earnings ratio of the Shanghai A-share market to change.A-share market price-earnings ratio can not cause changes in interbank interest rates in Shanghai,the interest rate has a significant negative impact on price-earnings ratio,and the impact gradually increased.At the same time,this article also analyzes the two indicators from the micro level,that is,the regression analysis of the relationship between the PE and the market interest rate of A-share stocks of Shanghai Stock Exchange shows that there exists between the market interest rate and the price-earnings ratio of A-share stocks But there is no direct relationship between the two.At the same time,this article further analyzes the active stocks,and finds that the market interest rate has a greater influence on the stocks with higher trading activity and the transactions with more active business,Its stock valuation is more susceptible to market interest rates and its valuation changes as market interest rates change.