Stock Market plays a vital role in mobilizing the savings from a large pool of savers and channelizing these funds into fruitful investments. The investors who invest in stock exchange have the only consideration and that is to maximize wealth. The increasing international diversification, cross-market return correlations, adoption of floating exchange rates by many countries, have increased the opportunities of investment decisions and portfolio diversification decisions (Aydemir and Demirhan, 2009). The return on stocks is based on a number of factors, the exact number is not yet known. Many studies tried to explain the relationship of macroeconomic factors like GDP, exchange rate, interest rates, money supply, foreign investment and inflation etc with the stock prices (Shew, 2008; Aydemir and Demirhan, 2009; Eleftheriou and Apergis, 2002; Li and Wu, 2008). There are two explanations for the relationship of exchange rates and stock prices. The flow-oriented model approach as de...