The Impact of Global Oil Price Shocks on the Stock Indices of Five Leading Industries in Tehran Stock Exchange

Document Type : Original Article

Authors

1 Department of Economics Sciences Faculty of Economics and Administrative Sciences University of Mazandaran

2 Department of Management & Economics, Faculty of Humanities and Social Sciences, Golestan University, Gorgan, Iran.

10.22080/jeem.2025.28369.1023

Abstract

Oil prices, as one of the key factors in the global economy, have a significant impact on various industries and the capital market. Their fluctuations can directly and indirectly affect stock indices in oil-dependent countries. The capital market plays an important role in financing companies and driving economic growth, while stock indices, as indicators of the performance of different economic sectors, reflect economic conditions and the influence of internal and external factors. This study examines the effect of global oil price shocks and exchange rate fluctuations on the stock indices of petrochemical, refining, basic metals, automotive, and banking sectors in Iran's stock market. Daily data from April 2021 to December 2024 have been utilized for this analysis. The results of employing the Structural Vector Auto regression (SVAR) model indicate that during the specified period, the stock indices of the selected sectors were primarily influenced by internal shocks within their respective groups, with the impact of oil price and exchange rate shocks being very limited. These findings highlight the unique dynamics of Iran's capital market and its greater sensitivity to domestic factors.

Keywords

Journal of Energy Economics Modeling
Volume 1, Issue 1
September 2023

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History

  • Receive Date: 08 January 2025
  • Revise Date: 31 January 2025
  • Accept Date: 04 February 2025
  • Publish Date: 23 August 2023

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