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Metal prices and stock market performance: Is there an empirical link?

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  • Irandoust, Manuchehr

Abstract

Most studies have focused on the role of oil and gold prices in the link between commodity prices and stock prices. This paper investigates the causal linkage between metal prices and share values for 10 European countries over the period of January 2011 to September 2016. On the basis of the bootstrap panel granger causality approach, the results show that the metal price index and stock price index are not causally related. The policy implication of this empirical finding is that the financial markets are informationally efficient in the sample countries' equity markets. Thus, the information contained in the metal price index cannot be used to predict the future values of the equity indexes.

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  • Irandoust, Manuchehr, 2017. "Metal prices and stock market performance: Is there an empirical link?," Resources Policy, Elsevier, vol. 52(C), pages 389-392.
    • Handle: RePEc:eee:jrpoli:v:52:y:2017:i:c:p:389-392
    DOI: 10.1016/j.resourpol.2017.05.001
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    More about this item

    Keywords

    Stock price; Metal prices; Causality; European countries; Efficient market hypothesis;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

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