Effect of Oil Prices on Selected Indices of Borsa Istanbul

Abstract

Oil which is defined as lifeblood of modern economies by some authors is highly associated with growth in industrial production. Although there are many studies which examine the relationship between oil prices and macroeconomic activity, there is limited number of study examining the relationship between oil prices and stock markets. This paper attempts to differentiate itself by examining that relation from perspective of sector indices (BIST-Financial, BIST-Technology, BIST-Services and BIST-Industrial) and selected sub-sector indices (BIST-Chemical Petroleum Plastic and BIST-Electricity). Selected sub-sector indices represent industries where oil is used as input.