THE EFFECT OF INTERNATIONAL CRUDE OIL PRICES AND GOLD PRICES ON THE INDIAN STOCK MARKET (S&P BSE SENSEX): AN EMPIRICAL STUDY (1986-2017)

In today?s globalized world a wide variety of factors influence the stock market which is considered to be the backbone of the financial economy. Crude Oil and Gold are considered to be important factors influencing the stock market. This research paper attempts to find the role and the effect of fluctuations of the International Crude Oil Priceand Gold Price on the Indian stock market (S&P BSE SENSEX). This study is conducted by collecting monthlydata from London Bullion Market,U.S. Energy Information Administration, Bombay Stock Exchange (BSE) and BP StatisticalReview of WorldEnergy. Analysis is drawn over the period of 1986-2017 and further comparative analysis is drawn over the period 1986-2001 and 2002-2017. The researcher empirically analysed the data using econometric and statistical tools like Correlation, Regression and Variance Analysis. This research is of vital importance in the area of stock market as it discusses in depth and provides comprehensive analysis of the impact of ?Crude OilPrice and Gold Price on S&P BSE SENSEX. The study concludes that there is a significant correlation between Crude oilPrice, Gold Priceand Stock indices in the long term that is, both crude oil price and gold price are positively related to the stock market for the period of 1986-2017. But contrasting results were observed during the periods of 1986-2001 and 2002-2017,where relationship of 1(International Crud Oil) changes from positive to negatively and relationship of 2(Gold Price) changes from negative to positive from 1986-2001 to 2002-2017.