What is it about?
The paper attempts to examine the causal association between the crude oil price anomalies and stock market returns in the Indian stock market. The study covers 9 years starting from 2009 to 2018, and the study includes ten companies in the oil drilling and exploration sectors listed in the BSE Sensex and CNX NIFTY indexes. We employed correlation tests in determining the relationships amongst the stock market return, crude oil price and market benchmarking indexes. Our study concludes that the oil price shocks is not directly affecting the stock prices of oil-related firms; instead, its indirectly impacting the economy through different channels such as fiscal, trade and price channels. We also suggest the need for future researches in determining the effect of oil price variations on the macroeconomic factors by precisely diagnosing the role of channels mentioned above.
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Why is it important?
Our study concludes that the oil price shocks are not directly affecting the stock prices of oil-related firms; instead, it indirectly impacting the economy through different channels such as fiscal, trade and price channels. We also suggest the need for future researches in determining the effect of oil price variations on the macroeconomic factors by precisely diagnosing the role of channels mentioned above.
Perspectives
I hope this article makes investors easy to understand the relationship between crude oil prices and stock market volatility.
Professor Iqbal Thonse Hawaldar
Kingdom University
Read the Original
This page is a summary of: CAUSAL NEXUS BETWEEN THE ANAMOLIES IN THE CRUDE OIL PRICE AND STOCK MARKET, International Journal of Energy Economics and Policy, March 2020, EconJournals,
DOI: 10.32479/ijeep.9036.
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