Dynamic relationship between commodities and Indian Stock Market

Abstract

Now-a-days, the interconnectedness between the economies of the world is enhancing significantly. All the markets around the globe are interlinked with each other especially after the globalization. The relationship among all the asset classes has gradually deepened.
Any fluctuations in the price of an asset class have a direct or indirect impact on other asset classes like the prices of commodities trade over the world have an impact on all the asset classes around the world. As far as a country like India is concerned, the country is
the largest importer of all the major commodities like gold, crude oil, copper, etc. So, when there are any fluctuations arising in the prices of these commodities, it leads to the fluctuations in the stock market which is also known as "Spillover Effect". Commodities and Stock Market are showing significant linkage over the number of years as the prices of the commodities have dual impact on the stock market.