Impact of Geopolitical Risk and Crude Oil Prices on Stock Return

Authors

Chinmaya Behera, Goa Institute of Management, IndiaFollow
Biswashree Tanaya Priyadarsini, Birla Institute of Technology and Science, IndiaFollow
Debasis Patnaik, Birla Institute of Technology and Science, IndiaFollow

Document Type

Call for Paper

Abstract

This study examines the impact of oil prices and geopolitical risks (GPR) on sectoral stock returns in Australia, Japan, USA, and India. Using data from September 13, 2017 to May 30, 2023 and Westerlund and Narayan's method, the study finds oil prices positively affect pharma and commodity stocks, while GPR benefits commodity stocks, excluding banking in Australia. Further, GPR negatively impacts only banking stocks due to increased uncertainty and risk aversion in USA. Similarly, GPR adversely affects banking stocks in India that leads capital outflows and economic instability, while oil prices positively influence pharma and commodity stocks. Policymakers are advised to stabilize the banking sectors to mitigate the impact of GPR, and investors need to take GPR into account while making investment decisions in banking sector.

Recommended Citation

Behera, Chinmaya; Priyadarsini, Biswashree Tanaya; and Patnaik, Debasis (2024) "Impact of Geopolitical Risk and Crude Oil Prices on Stock Return," Bulletin of Monetary Economics and Banking: Vol. 27: No. 0, Article 4.
DOI: https://doi.org/10.59091/2460-9196.2158
Available at: https://bulletin.bmeb-bi.org/bmeb/vol27/iss0/4

First Page

45

Last Page

58

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

India

Affiliation

Goa Institute of Management