'Crude Oil Price Velocity & Stock Market Ripple' - A Comparative Study of BSE with NYSE & LSE

8 Pages Posted: 2 Aug 2012

See all articles by Kirti Khanna

Kirti Khanna

NIMS University

Nidhi Sharma

Dayalbagh Educational Institute

Date Written: July 3, 2012

Abstract

In this new era of economic growth, the exceptional increase in the crude oil prices is one of the significant developments that affecting the global economy. Crude oil is an important raw material used for manufacturing many goods, so that an extraordinary increase in the price of oil is bound to warn the economy with inflationary tendencies. This paper has analyzed the performance or the reaction of the stock market towards the crude oil price change. For this purpose, this study has considered mainly three stock markets; New York Stock Exchange (NYSE), Bombay Stock Exchange (BSE) and London Stock Exchange (LSE); belongs to USA, India and UK respectively. In this study the researcher has established the relationship between those stock markets with their crude oil benchmarks, West Texas Intermediate (NYMX), MCX crude oil (Multi commodity exchange of India) and UK Brent Blend. The study further has a discussion about the relationship of OPEC benchmark and selected stock market with oil benchmarks. The study is based on the daily % changes in oil prices and % changes in daily market returns as per the stock market indices from 2008-09 to 2010-11.the result of study shows that there was the significant impact of crude oil changes on stock market returns up to the some extent. For analysis different statistical tests have been applied by using SPSS, Minitab and IBM Amos statistical software.

Keywords: stock market, crude oil prices, daily market returns, correlation, regression

JEL Classification: C13, C32, G1, G15

Suggested Citation

Khanna, Kirti and Sharma, Nidhi, 'Crude Oil Price Velocity & Stock Market Ripple' - A Comparative Study of BSE with NYSE & LSE (July 3, 2012). Available at SSRN: https://ssrn.com/abstract=2122258 or http://dx.doi.org/10.2139/ssrn.2122258

Kirti Khanna (Contact Author)

NIMS University ( email )

Shobha Nagar
Jaipur-Delhi Highway (NH-11C)
Jaipur, Rajastan 303121
India

Nidhi Sharma

Dayalbagh Educational Institute ( email )

Dayalbagh University
Agra, Uttar Pradesh 282005
India

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