Impact of oil prices, gold prices, exchange rate and inflation on stocks evident from oil and gas sector of Pakistan

Abstract

This research is undertaken to investigate the relationship between the stock prices and the oil and gold prices, exchange rate and inflation. This investigation will help the investors to make informed decision and make batter portfolio choses. The research will also provide bases of the researcher who further want to explore this topic. The nature of relationship is found in this study, The sample size is nine, the industry is oil and gas, duration of the period under investigation is ten years. The data form 2004 – 2014 was analyzed using trend analysis and the relationship between the independent variables and dependent variables are calculated by the use of regression analysis. It is found in trend analysis that in 2009 inflation reached highest point, oil prices were also very high and there was also a sharp decrease in rupee value against dollar and during the same time the stock prices also declines. In the regression the association of oil prices with stock prices are negative so are the correlation of exchange rate or dollar prices. There is a strong negative correlation of stock prices with inflation. Key world: Exchange rate, oil prices, Gold prices Stock prices, stock returns, oil and gas Pakistan.