The Impact of Oil Prices Shocks on Stock Market Performance-Examination for Six European Countries and India

Abstract

This study employs a Vector Auto-regressive model to analyses how oil price impact real stock returns, comparing oil-importers (Italy, Spain, Finland, France, UK, and India) and exporter Norway. Focusing on six European nations, it examines regional systematic responses, contrasting with prior European analyses using national oil prices. The results show a statistically significant impact on stock market return for Norway, Italy and Spain, while show an insignificant impact for India, Finland, the UK and France. Besides, this study found that the responds of stock return on oil shocks are differ depend on the nature of economy and European countries show more responsive crude oil shocks than emerging market India.