Impact of oil price shocks on stock market indices

Crude oil is one of the most necessitated worldwide required commodity. Any slightest fluctuation in crude oil prices can have both direct and indirect influence on the economy. The volatility of crude oil prices drove many companies away and had an impact on the stock market also. Crude oil has many uses in many different markets and industries. So changes in the global price of oil inevitably have an effect on the microeconomics of particular sectors of the economy. The study deals with fluctuation in crude oil prices and its impact on Indian Market indices. It examines whether the fluctuation in crude oil prices have a positive or negative impact on Indian stock market. Co-efficient of correlation, Hypothesis testing i.e. Bivariate test have been used for the study. The study establishes that fluctuations in crude oil prices have a significant impact on Indian market indices. it is not only the price of crude oil which have an effect on Sensex but there are several factors like inflation, exchange rate, exports and imports which also have great impact on Sensex.