The Nexus between Oil Price and Stock Returns from a Global Economic Perspective

Abstract

The connection between oil prices and stock returns in a developing economy was analyzed in the current study. Given the regular market turbulence that causes investors to lose money, it is unquestionably important to investigate the link between oil prices and stock returns in line with recent series. We demonstrate that the two variables (Price of oil and stock returns) have a short-run linear association using the Autoregressive Distributed Lag (ARDL) estimation technique. Overall, our finding emphasized the relevance of oil price in driving stock returns, which ultimately adds to the discourse of oil price and stock market literature by recognizing the worldwide nature of oil and financial markets. Investors and other players in the financial market could benefit from the findings of this study.