IEMS Journal of Management Research

Volume: 11 Issue: 1

  • Open Access
  • Original Article

AN EMPIRICAL STUDY ON EFFECT OF OIL PRICES ON SELECTED BLUE-CHIP COMPANIES IN NSE DURING 2014-2019

Prof. Shaktianand Chikkur

Assistant Professor, IEMS B-School, Hubballi

Year: 2023, Page: 59-77,

Received: May 9, 2023 Accepted: May 12, 2023 Published: May 23, 2023

Abstract

This paper is directed towards a study as to how crude oil prices affect some blue-chip companies listed in NSE. It is important to understand whether crude oil prices cause volatility in some blue-chip stock prices, as the blue-chip companies are major driving forces behind the growth of economy. Secondary source of data is being used in this research. The indicators considered for the study are Stock prices of blue-chip companies listed in NSE. The data is collected for a period of 5 year i.e., 2014–2019. Granger causality test is used to determine whether crude oil prices cause volatility in blue chip stock prices. As per the results, it was found that variation in stock prices of ITC and ONGC causes volatility in crude oil prices whereas variation in crude oil prices causes volatility in stock prices of ICICI Bank. It was also found that variation in crude oil prices does not cause volatility in stock prices of other blue-chip companies. Investors should focus on crude oil price volatility before buying ICICI stock. Special focus should be given on health of ONGC and ITC as volatility in their prices causes volatility in crude oil price.

Keywords: Crude oil prices, Blue-chip companies, NSE (National Stock Exchange), Stock price volatility, Granger causality test.

References

1. Obi, B., Oluseyi, A. S., & Evans, O. (2018). Impact of Oil Price Shocks on Stock Market Prices Volatility in Nigeria: New Evidence from a Non-linear ARDL Cointegration. Journal of Global Economy, 14(3), 173-190.
2. Eraslan, S., & Ali, F. M. (2018). Oil price shocks and stock return volatility: New evidence based on volatility impulse response analysis. Economics Letters, 172, 59-62.
3. Al-hajj, E., Al-Mulali, U., & Solarin, S. A. (2018). Oil price shocks and stock returns nexus for Malaysia: Fresh evidence from nonlinear ARDL test. Energy Reports, 4, 624-637.
4. Bastianin, A., & Manera, M. (2018). How does stock market volatility react to oil price shocks? Macroeconomic Dynamics, 22(3), 666-682.
5. Tchatoka, F. D., Masson, V., & Parry, S. (2018). Linkages between oil price shocks and stock returns revisited. Energy Economics.
6. Dhaoui, A., Streimikiene, D., Saidi, Y., Shahzad, S. J. H., Loganathan, N., & Mardani, A. (2018). Exploring the Oil Supply-Demand Shocks and Stock market Stabilities: Experience from OECD Countries. Acta Montanistica Slovaca, 23(1).
7. Amassoma, D., & Ogbuagu, M. (2018). Exploring the Nexus between Crude Oil Price and Stock Prices in Sub-Saharan Africa: A Case Study of Nigeria. Entrepreneurial Business and Economics Review, 6(3), 143-158.
8. Nusair, S. A., & Al-Khasawneh, J. A. (2017). Oil price shocks and stock market returns of the GCC countries: empirical evidence from quantile regression analysis. Economic Change and Restructuring, 1-34.
9. Ojikutu, O. T., Onolemhemhen, R. U., & Isehunwa, S. O. (2017). Crude oil price volatility and its impact on Nigerian stock market performance (1985-2014). International Journal of Energy Economics and Policy, 7(5), 302-311.
10. TOROITICH, S. K. (2018). THE EFFECT OF OIL PRODUCTION ON FINANCIAL MARKET DEVELOPMENT AMONG COUNTRIES IN AFRICA.
11. Maboudian, E., & Seyyed Shokri, K. (2015). Reinvestigation of oil price-stock market nexus in Iran: A SVAR approach. Iranian Economic Review, 19(1), 81-90.
12. Lee, Z. L., Chow, Y. H., Lim, B. K., Tan, C. Y., & Ting, C. Y. (2015). The impact of oil price on Malaysian stock market during the period of 2014 oil shocks (Doctoral dissertation, UTAR).
13. Marashdeh, H., & Afandi, A. (2017). Oil price shocks and stock market returns in the three largest oil-producing countries. International Journal of Energy Economics and Policy, 7(5), 312-322.
14. Brose Olsen, A., & Henriz, P. (2014). Oil Price Shocks and Stock Market Returns: A study on Portugal, Ireland, Italy, Greece and Spain.
15. Broadstock, D. C., & Filis, G. (2014). Oil price shocks and stock market returns: New evidence from the United States and China. Journal of International Financial Markets, Institutions and Money, 33, 417-433.
16. Abhyankar, A., Xu, B., & Wang, J. (2013). Oil price shocks and the stock market: evidence from Japan. The Energy Journal, 34(2), 199-223.
17. Wang, Y., Wu, C., & Yang, L. (2013). Oil price shocks and stock market activities: Evidence from oil-importing and oil-exporting countries. Journal of Comparative Economics, 41(4), 1220-1239.
18. Adaramola, A. O. (2012). Oil price shocks and stock market behaviour: The Nigerian experience. Journal of Economics, 3(1), 19-24.
19. Berk, I., & Aydogan, B. (2012). Crude oil price shocks and stock returns: Evidence from Turkish stock market under global liquidity conditions (No. 12/15). EWI Working Paper.
20. Ono, S. (2011). Oil price shocks and stock markets in BRICs. The European Journal of Comparative Economics, 8(1), 29-45.

Cite this article

CHIKKUR S. AN EMPIRICAL STUDY ON EFFECT OF OIL PRICES ON SELECTED BLUE-CHIP COMPANIES IN NSE DURING 2014-2019. IEMSJMR.2023;11(1):59-77

Views
96
Downloads
38