Study On The Relationship Between International Oil Price And Stock Indices Based On I-nets

The study of the relationship between oil prices and stock market has greatsignificance for the development of country economy. Selecting the daily data, fromJanuary3,2000to March16,2012, of Brent crude oil spot prices and the main stockindices from28countries and regions, this paper first studies on whether theinternational oil prices have some causal relationships with the world’s major stockindices. Then based on the causal relationships between international oil prices andstock index, this paper establishes a directed weighted network which is called I-nets.Through analyzing the network topology, node status, node influence, node conflictand weight emergence of I-nets, this paper studies the interaction rules between theinternational oil prices and global stock market.The results are as follows:First, the impact of international oil prices on the stock index is hierarchical. Andthe stock index return rates of Switzerland, Norway, Ireland, Hong Kong, Japan,Thailand, Philippines, Australia, New Zealand and South Africa will be the first to beinfluenced by the international oil prices change rate. Moreover, stock index returnrates of China(SSE) has no direct causal relationship with the international oil priceschange rate.Second, if all the link weights of the oil-stock I-nets were diminished to0.1, thestock indices of I-nets would reach a synchronization move with the international oilprices.Third, the method of decreasing the inbound link weights of a stock index node tominimize the economic influence other nodes have on the stock index node, andincreasing the outbound link weights to increase the stock index node’s influence onits outbound neighbors will enhance the influence of the stock index node on I-nets.Fourth, stock indices of oil-producing countries,such as New Zealand, SouthAfrica, Argentina, Thailand, Norway, Mexico and Canada, will have greater influenceon international oil prices.Fifth, the rises and falls of international oil prices change rate will lead to the sameway moving of stock index return rates of Malaysia, Canada, South Korea, HongKong, Switzerland, Singapore, Norway, Ireland, Philippines, Japan, New Zealand andAustralia. And the rises and falls of stock index return rates of most countries will lead to the same way moving of international oil prices change rate. Moreover, therises and falls of stock index return rates of Singapore, Canada, Argentina, SouthAfrica and Norway will lead to a sharp same way moving of international oil priceschange rate.