An econometric analysis towards crude oil price movement in Indian Stock Market

The present study has been undertaken to analyse the impact of Crude Oil price on the movement of Indian stock market. For this purpose, Crude Oil price and indices of BSE500 and NSE500 are taken as variables. Data for the above variables are collected for a period of 14 years from 2004 to 2018 on a daily basis with a total number of observations of 3740. The study used descriptive statistics, correlation, regression analysis, ADF unit root test, Johansen co-integration test and Granger causality test for analysis. The study found that Crude Oil price and the movement of the Indian stock market have significant positive relationship and significant and low positive impact on the movement of Indian stock market, since many factors are responsible for the movement of stock market, Crude Oil price is one among them. Crude Oil price, BSE500 and NSE500 had unit root during the study period. The study did not find any co-integration relationship between Crude Oil price and Indian stock market during the study period. It is also evidenced that Crude Oil price did not have granger cause on Indian stock market in terms of BSE 500 and NSE 500 and Indian stock market also did not have granger cause on Crude Oil price during the study period. It is concluded that fluctuations in Crude Oil price have a significant impact on the market movement in India, but that impact is not notable.