Research On The Impact Of International OilPrice Fluctuation On Stock Market Of China

Oil hailed as the "blood of industry",has a self-evident strategic significance for the survival and development of countries around the world.Since the birth of the first oil futures contract in the last century,the linkages between international oil markets and financial markets,especially stock markets of different countries,are gradually getting stronger,leading to the result that more and more factors have an effect on international oil prices.Frequent fluctuations in oil prices will also affect the stock market more significantly.The demand of China for oil has long been among the top around the world.From a macro point of view,the shock of international oil prices will have an effect on the general direction of China’s stock market through the economic level;from a micro point of view,the shock of international oil prices will directly affect the stock prices.Different from developed countries with complete financial market development,the stock market of China started late and has low stability,making it more vulnerable to international financial factors.Based on the above reasons,a careful study of the relationship between international oil prices and my country’s stock market is not only conducive to a more comprehensive understanding of the mechanism of international oil price shocks on China’s stock market,but also has practical significance for investors and governments to prevent risks.Starting from literature review and review,this thesis summarizes the international oil price pricing rules,analyzes the linkage between the oil market and the financial market,and then refines the research on the correlation between the international oil market and China’s stock market.This thesis selects the daily spot price of West Texas Light Oil(WTI)in the United States to measure international oil prices,and selects the daily Shanghai and Shenzhen300 index as the representative index of my country’s A-share market,and selects food and beverage,transportation,household Daily data of 7 industries including electrical appliances,chemicals,electronics,and real estate.This thesis uses the HAR-RV model to study the relationship between the international oil price and the Chinese stock market,and finds that: First,within the time span,there is an impact between the international oil price and the Chinese stock market,whether it is a series of oil price volatility or frequency.After the domain decomposition,the international oil price has a significant impact on the volatility of the real estate industry index.Second,the high-frequency components of the drop in oilprices have a significant impact on the household appliances,chemical and electronic industries.One point of concern: the linkage between international oil prices and my country’s stock market will increase significantly from the beginning to the end of the economic crisis.Third,changes in total supply will inevitably lead to fluctuations in oil prices,so the low-frequency component of oil price volatility will be significantly positive for a long time.The low-frequency volatility of oil prices has a significant negative impact on food and beverage,transportation,and real estate indexes.Fourth,the high-frequency oil price volatility has a significant negative impact on the food and beverage and real estate industries,while the medium-frequency oil price volatility only has an impact on the real estate industry and is not significant for other industries.Based on the empirical conclusions of this thesis,the following policy recommendations are made: First,based on the demand for a more stable international environment for the construction of China’s financial market,relevant departments should conduct macro-control and formulate corresponding monetary policies for different international oil price situations.And fiscal policy to resist the impact of international oil price shocks on China’s stock market.Second,China has always been a price taker in the international oil market.In order to strengthen China’s right in the international oil market,government should establish a scientific oil reserve system as soon as possible to more effectively prevent financial risks caused by international oil price shocks.Third,from the micro level,companies in China’s oil-related industries should improve their ability to withstand risks in the international oil market,so they should actively enter the international oil futures market to better understand the futures market.In this regard,the government should issue corresponding preferential and protective policies to increase the enthusiasm of enterprises on the one hand and reduce their worries on the other hand.Fourth,in response to different international oil price situations,domestic investors should adopt differentiated investment strategies based on industry characteristics in order to reduce the impact of international oil price volatility on the capital market including the stock market,and maintain the stability of the financial market.