ANALYSIS OF EFFECTS OF VOLATILITY IN OIL PRICES ON OTHER FINANCIAL INSTRUMENTS IN DEVELOPING COUNTRIES: A STUDY ON INDIAN AND CHINESE STOCK INDICES
The purpose ongoingstudy/research is to examine the impact of instability in rates of crude oil on movement in equity markets of developing countries by considering the case of India and Brazil. We are going to understand the relation by using various statistical tools on historical data available. The extent of research includes the past 10 years data of NIFTY 50 (India), Shanghai Composite (SSEC) and Brent crude oil price. By looking at comparative charts of crude oil price and S&P 500 and literature available on that, there exists a considerable relationship between each other during certain critical events. Since fossil oil is considered as one of the highly traded market worldwide and there is quite an uncertainty about the future price there is a huge scope of research in this particular field. As we have seen a very sharp fall in both the equity market and rates of crude oil due to unforeseen situations like Covid-19 and financial crisis of 2008. As both instruments follow the universal concept of demand and supply, there may be some correlation between them as well. The rationale behind choosing India and china is continuous expansions oil supply from US and shifting demand of petrochemicals to developing countries..