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Causal Nexus between the Anamolies in the Crude Oil Price and Stock Market

Author

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  • Iqbal Thonse Hawaldar

    (Department of Accounting and Finance, College of Business Administration, Kingdom University, Bahrain,)

  • T. M. Rajesha

    (Institutional Assessment Administrator, Accreditation and Quality Assurance Centre, Kingdom University, Bahrain)

  • Lokesha Lokesha

    (Government First Grade College Punjalakatte, Karnataka, India,)

  • Adel M. Sarea

    (College of Business and Finance, Ahlia University, Bahrain.)

Abstract

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 nine 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.

Suggested Citation

  • Iqbal Thonse Hawaldar & T. M. Rajesha & Lokesha Lokesha & Adel M. Sarea, 2020. "Causal Nexus between the Anamolies in the Crude Oil Price and Stock Market," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 233-238.
    • Handle: RePEc:eco:journ2:2020-03-29
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    More about this item

    Keywords

    Oil prices; Stock market; Crude oil price; Emerging Markets; Indian stock market;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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