Relation between Crude Oil Prices and KSE 100

The aim of this paper is to happen out the carbon monoxide relation and consequence of one variable ( rough oil monetary values ) to other variable ( kse-100 ) . It ‘s observed that when the monetary values of rough oil are changed in market the Karachi stock index is besides changed with regard to the petroleum oil. The affair is to happen out that is at that place any carbon monoxide relation in between kse-100 and rough oil monetary values if, it exist so what is the per centum of alteration. In other words we want to see that if there is full relation in altering the ratio, the investor can take their action on the footing of this research. The research is conduct to happen out the ground of sudden alteration in Karachi stock index, which is straight affected by the crude oil sector or by the changing of rough oil monetary value. Research is based on the fluctuation of rough oil monetary values ( the portions monetary value of those companies which trades in rough oil ) impact on Karachi stock index. We besides find out the causes of rises in monetary values of consumer goods. Research is conduct to lucubrate the grounds of rising pricess of consumer goods and the direct and indirect impact of rough oil monetary values on consumer goods and Karachi stock market return. We know that the addition in rough oil monetary values causes lessening in earning of the house earning, so the stock market monetary values of house besides decline, and this brought approximately immediate diminution in stock monetary values. The sudden alteration in stock index causes the to a great extent net income pickings and unsure status of capital market. The monetary values of a peculiar stock besides depend on the monetary value tendency of peculiar industry sectors, if the sectors monetary values are traveling upward the impact of their sentiments will decidedly proposed straight, we see this tendency peculiarly while the tendency of oil monetary values traveling upward the straight monetary values goes up, and frailty versa.

Problem statement

It ‘s observed that when there is addition in rough oil monetary value as the consequence the Karachi stock index is besides appreciate with regard the monetary value of crude oil sector. We agencies by the rough oil monetary value ( the portions monetary value of those companies which trades in rough oil ) . What happen really when the monetary values of rough oil addition, the cost of production addition and it impact on consumer goods as additions in monetary values, the indirect impact of increasing monetary values negatively affect on the economic system. When the monetary values of consumer goods are sudden additions the buying power of a individual does non increase so decrease in buying power causes lessening in ingestion, which farther slows down the economic system. Pakistan depends on import of oil for running its economic machinery ; the chief beginning of industrial fuel is based on rough oil. Although we are manufacturer of gas from our natural resource but it does non run into the whole exclusive ingestion of fuel and power. That ‘s why the direct and indirect impact of rough oil monetary values on economic system is negatively causes when the monetary value factor is addition. The oil as input factor for cost of production, respond straight to the monetary values of trade good. Particularly while the monetary values of oil are being increased, so for it cause the ground of rising prices and instability of the economic system. The aim is to analyze about the stock market volatility factors, such as political stableness, jurisprudence and order state of affairss, the peace and justness status in the state. There are some internal ( Controllable ) and external ( unmanageable ) factors set uping the index and monetary values of the stocks. We conduct this research by taking the full unmanageable factor invariable, to read out the monetary value altering consequence of petroleum oil monetary values on the other stock and on the kse-100 index. The sudden alteration in Karachi stock index disturbs the investor some clip it supply really high net income pickings. The governable factors of Karachi stock market are driven by the crude oil sector, peculiarly in instance of OGDC when the monetary value increase the kse-100 index besides addition. The crude oil sector is besides called the market leader. It ‘s chiefly observed it in Karachi stock market, where index is normally dependent on the oil sectors. We agencies by the rough oil monetary value ( the portions monetary value of those companies which trades in rough oil ) , OGDCL, PSO, PPL and POL. There are besides some other book related to the energy like gasses and refineries who has the alternate impact on the market index.

Hypothesis

The addition in rough oil monetary value positively impact on KSE-100 index ( hebdomadal footing ) .

The lessening in rough oil monetary values negatively impact on KSE-100 index ( hebdomadal footing ) .

Outline of the survey

The impact of alteration in rough oil monetary values on certain macroeconomics variables such as, existent GDP growing rates, rising prices, employment and exchange rate is besides relate to our survey country to supervise the alteration in buying power of common adult male by rises in rough oil monetary values. What happen really when the monetary values of rough oil increase the rising prices take topographic point in society in general consumer goods which can detect with in few yearss of altering monetary value of rough oil. The ingestion when lessening the demand finally declines which causes the addition in unemployment and fall down the economic system. The ground of rising prices is due to the higher cost of cost of production, and instantly rises in the fuel disbursals and other transit mediums. The aim of paper is to analyze the stock market volatility spillover, the extremely volatile market thread the investor to put often in the market. Although the market is affected by the governable and unmanageable factor, the external factors are non governable but the house can minimise the hazard from governable factors. The governable factors for any house are natural stuff, fuel, expanses. The fuel is including gas, oil, coal, and other factor of energy bring forthing. The investors in Karachi stock are really witting due to the high volatility in index, some clip this is due to the political conditions and due to the victimization of terrorist act. The uncertainness in the state and the terrorist act in metropolis besides disturb the investors approach. The unmanageable factor although alteration the index, but mean while it ‘s covered with clip period and stableness allotments. The causes of extremely fluctuation of stock index due to the alteration in monetary value of petroleum oil the little investor which have no more capacity to step purchasing and some clip they lose their money when they are merchandising on the debit recognition system.

Definitions

Crude oil sector: affect the portions monetary value of major lending companies as OGDC, PPL, POL, and PSO.

Chapter 2: LITERATURE REVIEW

Eryigit, ( 2009 ) Test the impact of Oil Price on the Istanbul Stock Exchange. In this article the writer examine the relationship of alteration in Meleagris gallopavo stock index due to the alteration in oil monetary values. The energy sectors oil monetary value used to cipher the effects of the oil monetary value on indexes ( Istanbul Stock Exchange ) . Statistical information is taken from 2000.01.04 to 2008.01.11.On day-to-day footing. Harmonizing to the consequences oil monetary value alterations have statistically important effects on consumer goods. All statistically important effects coefficients are positive. Some of these coefficients were expected to be negative, Such as transit should be negative. When the oil monetary value addition, the cost of transit will increase and it is expected that oil monetary value increasing has negatively impact on houses ‘ stock monetary values.

Jones and Gautam, ( 1996 ) Test the impact of international stock markets on oil dazes during Iraq and Kuwait war, in both the United Kingdom and Japan. In fact, based on statistical and qualitative analyses, Hamilton argues that we must give a causal reading to the correlativity between oil monetary values and macroeconomic phenomena. The research worker trials of whether stock monetary values respond rationally. The research experienced of four states the United States, Japan, Canada, and United Kingdom to estimate the effects of oil dazes on different economic systems. The consequence shows that stock returns have a strong positive relation with current and future hard currency flows in all four states. These consequences appear to be robust to measurement mistakes in oil monetary values, rising prices, and existent hard currency flow variables used in this survey. It ‘s concluded that the postwar oil dazes appear to hold generated volatility in the Nipponese and U.K. stock markets that is in “ extra ” of what can be explained by bing rational theoretical accounts.

Helliwell and Robert, ( 1982 ) the research worker trial the Stabilization, Allocation and the 1970s Oil Price Shocks. Researcher trial that the monetary values of gasolene respond really rapidly specially in additions than decreases the rough oil monetary value. The monetary values of gasolene or other crude oil back uping fuel stuff ‘s besides impact the monetary values of rough oil and it disturb the correlativity of rough oil monetary values and stock market index. The research worker elaborates how switches between different economic governments for the G-7 states are in general non satisfactory. The research documents focused on one common thing, that the impact of oil monetary values change on stocks monetary values impact on short term but it does non alter the monetary value of stock in long tally. The paper analyze the stabilisation and allotment effects of two types of policy adopted by Canada in the 1970s to shelter the domestic economic system from the 1973-74 and 1979-80 dazes in universe oil monetary values. It ‘s proposed to analyse the effects of these policies on allotment, and to see to what extent there could be said to hold been a trade-off. The equation construction of the macro block of theoretical account is reproduced, which estimates of the allotment and stabilisation effects of three alternate Canadian energy pricing schemes. Researcher summarized the consequences and point out some of the deductions and defects of our analysis. The one of import losing parametric quantity in research paper is the absence of correlativity factor of oil monetary values alteration with other factors of economic system. Borenstein and Richard, ( 1997 ) the research worker unwrap the causes of 1990-1991 Persian Gulf crisis and other recent oil market breaks have brought to attending the response of retail gasolene monetary values to fluctuations in universe oil monetary values. Some perceivers have asserted that the monetary values of gasolene react rapidly in increasing tendency the rough oil monetary values than lessenings. Even when the production and distribution procedure occurs entirely within one house, a company faces chance costs at every point in the procedure. The United States gasolene production and distribution procedure in greater item and, in this context, discourse the beginnings and rightness of the informations analyze. By analysing the monetary value response at each degree of distribution, and separate between the viing accounts for the asymmetric response. Sweeping gasolene monetary values respond about every bit rapidly to lessenings as to additions in topographic point monetary values for generic gasolene. The SRVY variables are dummy variables for the peculiar study of the twelvemonth, with P equal to 24 for semi-monthly informations and equal to 52 for hebdomadal informations, from March 1986 through the terminal of 1992. The informations used Begin from March 1986. A one cent per gallon addition in the monetary value of oil is estimated to increase gasolene monetary values by 0.55? Uniting these two transmittals, it ‘s happen out that sweeping gasolene monetary values respond significantly faster to crude monetary value additions than to lessenings.

Rotemberg and Michael, ( l996 ) Observed the alterations in monetary value of oil on universe markets which have a important function in economic activity. Fewer research efforts investigate the effects of oil-price alterations on plus monetary values, such as stock monetary values or stock returns. On theoretical evidences, oil monetary value dazes affect stock market returns or monetary values through their consequence on expected net incomes ( Jones et al. , 2004 ) . It can reason that an exogenic addition in factor of production may cut down the measure ( supplied ) of concluding end product. Researcher happen out how structural dazes are qualify the endogenous character of oil monetary value alterations impact on stock-market returns in eight states – Australia, France, Canada, Japan, Germany, Italy, the United Kingdom, and the United States. Researcher used vector car arrested development theoretical account to analyse oil-price alterations in three constituents oil-supply dazes, planetary aggregative demand of oil, and planetary oil demand dazes. Researcher fined out international stock market returns do non reacting in a big sense to oil market dazes.

Fazilah and Bhat, ( 2009 ) Elaborate the consequence of oil monetary values alterations on the stock monetary value of crude oil soctor companies in three different markets ( US, India and UK ) . Data is used on the day-to-day footing. The relation between the monetary values of oil and stock monetary values discuss the economic variables such as involvement rates and industrial merchandises. For illustration, Hamilton ( 1983 ) interprets the relation of oil monetary value and the Gross National Product ( GNP ) . Three stock markets are selected: New York Stock Exchange ( NYSE ) , London Stock Exchange ( LSE ) and the National Stock Exchange India ( NSE ) The six stocks of oil companies two each from the above three stock exchanges are chosen for research completion. The choice of the oil companies based on the public presentation and therefore those holding the height return on Equity ( ROE ) . The day-to-day involvement rates and industrial productions are used as control variables in the analysis. The Co integrating of variables is tested utilizing Vector Auto Regressive and Error Correction Method. The consequences show that the standard mistake of the equation provides a step of how different the predicted values of the dependant variable are from the existent values. In general, smaller values are better because they indicate a tighter suiting theoretical account ( less scattering about the arrested development line ) . The consequences show there is short tally and long tally relationship in between the oil monetary value and oil stocks. The monetary value of oil volatility has a definite impact on the volatility of stocks of oil.

MAGHYEREH and Aktham, ( 2004 ) IN this paper the research worker happen out the relationship between oil monetary values and stock index. The stock market informations in this paper are obtained from Morgan Stanley Capital International ( MSCI ) . The sample is day-to-day encompasses the period from 1 January 1998 to 31 April 2004. And stock market indices for the undermentioned 22 emerging states. The day-to-day shutting monetary values for rough oil Brent for the period from 1 January 1995 to 31 April 2004 are obtained from the U.S. Energy information. Vector car arrested development ( VAR ) attack used in this survey. The consequences show some interesting differences across states in response to the oil market dazes, depending on the energy strength of ingestion and production. The impact of oil dazes on stock market is highest in the largest Asiatic and Emerging Europe economic systems, as they have higher energy Intensity ingestion than most other emerging economic systems. These consequences suggest that stock markets in the emerging economic systems are inefficient in transmittal of new information of the oil market. E. Day and Craig, ( 1997 ) the research worker examine in this research paper the rough oil hereafter monetary values impact on initial border. Dramatic short tally additions in the volatility of stock market in October 1987 shows the relation between initial mar-gin demands and market volatility. The informations used to research daily shuting monetary values of petroleum oil hereafters, From November 14, 1986 to March 18, 1991. Result grounds shows that although additions and lessenings in border demands are preceded by important alterations in hereafters market volatility. Hamilton, ( 1983 ) in this research paper the writer discuss about the causes of United provinces rising prices after universe war 2. The rate of growing of existent GNP has fallen from an norm of 4.0 per centum, the 7.6 percent mean rising prices rate. The mean unemployment rate over 6.7 per centum was higher than in any twelvemonth between 1948 and 1972.Recessions in the United States have been preceded by a dramatic addition in the monetary value of petroleum. The correlativity between oil monetary value additions and existent end product can be explained as correlativity between endogenous macro variables. Lev, ( 1979 ) elaborates the impact of oil and gas companies on stock market. Many of the statements raised in this contention touched on the impact of the proposed accounting alteration on capital markets. To supply grounds on the market impact, the behaviour of stock monetary values of oil and gas companies was analyzed in this survey. The information was selected of different states to asses the trial like London, New York, Washington dc etc. Daily shuting stock monetary values for each sampled house were collected for a 78- trading-days period. The most Full Cost geographic expedition oriented companies and a important addition in the volatility of such net incomes. Consequences indicate that the release of the exposure bill of exchange was associated with a diminution of about 4.5 per centum, on norm, in the stock monetary values of “ full cost ” companies during a period of three yearss wining the release of the exposure bill of exchange. Rajgopal, ( 1999 ) The Commodity Price Risk Exposure of crude oil soctors. This determination claim that the hazard of new market revelations do non precisely reflect the houses ‘ hazard. The houses are free to take one of three describing options to do these revelations: ( 1 ) tabular presentation ( 2 ) sensitiveness analysis and ( 3 ) value at hazard. The consequences confirm that trade good monetary value hazard is similar to those required by SEC ( 1997 ) are, in general, associated with the market ‘s perceptual experience of oil and gas monetary value sensitiveness. The reading of this association is capable to the same cautiousnesss that apply to all association consequences. A sample of 246 O & A ; G houses was ab initio compiled from the 1996 Composted list of companies. Many houses were removed from samples due to their uncomplete efficiency in information record or their fiscal record. The sensitiveness analysis revelations are associated with oil and gas monetary value sensitivenesss. Therefore, both formats suggested by the SEC supply information associated with houses ‘ exposures to trade good monetary value hazard.

Smith and Michael, ( 1986 ) .The consequence shows the firm-specific effects of ordinance with stock market informations with an application to oil monetary value ordinance. Regulations are frequently introduced and reformed in response to unforeseen alterations in market forces. In late 1973, OPEC quadrupled the universe monetary value of oil and U.S. policy shapers responded by enforcing oil monetary value ordinance. How does one decompose measured unnatural returns into a part related to a higher universe monetary value of rough oil and a part related to the debut of U.S. oil monetary value ordinance? effects should depend on the comparative importance of five house features: foreign and U.S. oil production, foreign and U.S. refinement, and entree to price-controlled petroleum oil supports the given that important, unforeseen stock monetary value motions had occurred during the 4th one-fourth of 1973. Table 1 summarizes the portfolio findings for the 4th one-fourth of 1973 the usage of the firm-specific theoretical account of unnatural returns. The cause of this is the addition in oil monetary values universe broad. The impact of increasing in the oil monetary values on the return earned by refinery capital predicted that U.S. and foreign refinery operations would endure the same proportionate loss, with their differential entree to price-controlled rough oil held changeless. Ciner, ( 2001 ) Energy Shocks and Financial Markets is the country of research in this article, the writer analyze how the energy and rough oil dazes are impacting the stock market. The writer happen out that there is no additive linkage between these two variables ( s and P and oil monetary values ) . Most of the research worker claim that the recession in US after universe war two was due to the oil dazes. The information is used the day-to-day shutting monetary values of new York stock exchange and S & A ; p 500 index. The informations used April 11, 1983, both through March 16, 1990. Researcher happen out that there is no relationship between oil monetary value dazes and the motions of the S & A ; P 500 index, which is against the decisions of anterior research that suggest a important relationship between oil monetary values and the economic system. RJOUB and Samer, ( 2005 ) The research paper unwrap the monetary values of oil on the stock index of U.S from the late 1880ss to 2005.The research worker suggest that there is negative relation in oil monetary value daze and stock market return, that besides impact on the index. Study data screens the period from 1985 to 2004. The consequence shows that the fluctuation in oil monetary values has an immediate worse consequence on the stock market. Assorted dynamic theoretical account shows immediate negative impact of oil monetary value daze on the stock market. Granger trial of causality reject the nothing and accept that both oil daze and stock market return.

Nkomo, ( 2006 ) the paper finds out the impact of rough oil monetary values on the African capital economic system. The information is taken from the OPEC member ‘s states Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and U A E. The information is taken from 2000 to 2009. South Africa is exposed to increased monetary values and has imported rising prices as good. Upward increases in international petroleum oil monetary values partially account for escalation in domestic rising prices of African economic system. As in any market system, monetary values balance supply and demand by apportioning the scarce resource among viing terminal users.

Chapter 3: Research METHODS

3.1 Method of informations aggregation

Normally informations is taken from the specific method and techniques through the questionnaires or through observation. But in this instance we take the informations from other beginnings which is already been used and besides bias less. Data is used as the secondary informations, which is collected electronically from the web site of SECP and other web sites. The hebdomadal shutting of Karachi stock exchange ( KSE-100 ) and hebdomadal shutting of OGDC, PPL, POL, and PSO is taken from the official web site of Karachi stock exchange.

3.2 Sampling technique

Sample is taken as the hebdomadal footing to prove the correlativity between rough oil monetary values and Karachi stock exchange ( KSE-100 index ) . We use the hebdomadal informations alternatively of day-to-day. The consequence of day-to-day informations was really hard due to the high figure of observation, so we take the hebdomadal shutting informations to cover the maximal twelvemonth ‘s records. We mean by the rough oil monetary value ( the portions monetary value of those companies which trades in rough oil ) , OGDCL, PSO, PPL and POL. The norm of these all books is taken on hebdomadal footing. The information of rough oil monetary values and the Karachi stock exchange ( KSE-100 index ) is taken ( July, 2007-july, 2010 ) , which is the shutting of every hebdomads. The information holding really high figure of observations which is helpful to utilize SLR theoretical account of SPSS.

3.3 Sample size

Sample is the 161 figure of observation, which is taken on hebdomadal footing and the information of three old ages. This is healthy figure of observations in any informations to take the consequence on simple additive arrested development theoretical account ( SLR )

N= 161

The informations used is research is dependable and bias less, because it is taken straight from the consult governments. Which assure the truth of informations. The informations foremost was taken of three old ages on the day-to-day footing but subsequently we sum-ups it to see the important and clear impact rough oil monetary values on Karachi stock index. Then we take the hebdomadal shutting informations of both the variables.

3.5 Research theoretical account developed

The hebdomadal information is taken to develop the theoretical account. The measurement consequence of oil monetary values volatility on KSE-100 index is taken by this theoretical account. The theoretical account is used to happen the correlativity between variables. The Karachi stock exchange ( kse-100 index ) is used the independent and the crude oil sector ( the portions monetary value of those companies which trades in rough oil OGDCL, PSO, PPL and POL ) . is used as the dependent variables. The consequence shows that the variables are extremely correlated.

I = 264.031+ ( 45.983 ) Degree centigrade

In the above theoretical account the value of changeless 264.031, which shows that, when the monetary value of rough oil companies is zero the index will be sustained at 264.031. We can besides paraphrase the statement that if there is no company affect in rough oil covering the index figure would be 264.031. In the above theoretical account the incline is positive 45.983. The positive mark shows that both variables have direct relationship. While 45.983 shows that when the monetary value of rough oil Is increase by one rupees the index is gone up by 45.983.

3.6 Statistical technique

The simple additive arrested development is used to reason the consequence by reading of informations, because merely two variables are used to observation. One petroleum oil monetary values and other Karachi stock index. So the simple additive arrested development is really easy to reading of consequence and to asses the consequence of given informations. Regression developed the graphical presentation of two variables which are taken in research as informations, the simple additive arrested development shows one variable on X axis and the other one variable on Y axis. The correlativity of both variables can easy warrant on the footing of incline line which is showing the relation of two variables. The equation in theoretical account shows the incline line, which is positive and shows the relationship of variables attitude. We see when one variable ( rough oil monetary value ) is increased the other variable ( kse-100 ) is besides upward.

Chapter 4: Consequence

4.1 Findingss and reading of the consequence

Table 1: Correlations

kse-100 index ( hebdomadal )

rough oil monetary value

Pearson Correlation

kse-100 index ( hebdomadal )

1.000

.965

rough oil monetary value

.965

1.000

Sig. ( 1-tailed )

kse-100 index ( hebdomadal )

.

.000

rough oil monetary value

.000

.

Nitrogen

kse-100 index ( hebdomadal )

161

161

rough oil monetary value

161

161

The tabular array shows that there is 96 % correlativity in tried variables, which is extremely correlated. The significance degree which should be less than.05 for credence of the theoretical account, in our research the significance degree is.000 which is strictly demoing the credence of theoretical account.

Table 2: Model Summary B

Model

Roentgen

R Square

Adjusted R square

St. mistake of the estimation

1

965a

0.931

0.93

740.6261325

The R square and adjusted R square which is more than 0.93 shows the dependence of

Variables, it means there is 93 per centum dependence in tried variables. This besides shows the extremely

Correlation in rough oil monetary value and kse-100 index. The R square Shows the truth of variables

and dependability of informations variables.

Table 3: Analysis of variance B

Model

Sum of Squares

Df

Mean Square

F

Sig.

1

Arrested development

1.168E9

1

1.168E9

2129.474

.000a

Residual

8.722E7

159

548527.068

Entire

1.255E9

160

The significance degree in ANOVAs tabular array is.000, which shows the extremely credence of the theoretical account which should be less than.05 for credence of the theoretical account, so we can utilize this theoretical account to reading of the 100 Index figure on the footing of Crude Oil monetary value.

.

Table 4: Coefficients a

Model

Un standardized Coefficients

Standardized Coefficients

T

Sig.

Co one-dimensionality Statisticss

Bacillus

Std. Mistake

Beta

Tolerance

VIF

1

( Constant )

264.031

228.362

1.156

.249

rough oil monetary value

45.983

.996

.965

46.146

.000

1.000

1.000

VIF should be 2 or less than 2, here in our consequence VIF is 1 which is acceptable theoretical account. In the above theoretical account the value of changeless 264.031, which shows that, when the monetary value of rough oil companies is zero the index will be sustained at 264.031. We can besides paraphrase the statement that if there is no company affect in rough oil covering the index figure would be 264.031. In the above theoretical account the incline is positive 45.983. The positive mark shows that both variables have direct relationship. While 45.983 shows that when the monetary value of rough oil Is increase by one rupees the index is gone up by 45.983.

Figure 1:

Figure 2:

The information we used as dependent ( kse-100 ) is taken on Y axis and ( rough oil monetary value ) as independent variable on X axis. The graph present the co one-dimensionality among predicted and predictor variables. The incline line shows that when the monetary value of rough oil changes the stock index besides change with regard the monetary value, which extremely correlativity of variables. In the theoretical account the incline is positive 45.983, the positive mark shows that both variables have direct relationship The alteration is positive if the alteration in rough oil monetary value is positive and visa Vis.

4.2 Hypothesis appraisal sum-up

Both the hypotheses are accepted in our research, the incline of graph and important value.000 shows that there is high correlativity in variables. It accepts the research hypothesis ( the addition in rough oil monetary value causes as addition in kse-100 index and lessening frailty versa ) .

Chapter # 5: Discussion, CONCLUSIONS,

IMPLICATIONS AND FUTURE RESEARCH

5.1 Discussions

The theoretical account is to the full accepted and both the hypothesis are besides accepted. The incline of spread secret plan and significance degree ( .000 ) and R square and Adjusted R square ( .93 ) are demoing the extremely correlativity in rough oil monetary value and kse-100 index. The alteration in kse-100 is demoing obvious due to the alteration in rough oil monetary value.

5.2 Deductions and recommendations

The market behaviour of index is really sensitive issue, which avoid the most of the investor to put in the market. The imbalanced manner of chancing causes the losingss of short investors. Gambling should halt to promote the investors.

5.3 Future research

The following measure of this research is to happen out the causes of additions in rough oil monetary values. The monetary values of rough oil we have seen in our research how impact on the consumer goods and how it helps in rising pricess. The causes of economic interruption down is besides depends on the rising prices and on the buying power of general consumers. To happen out the ground of rising prices in universe broad most common job, it can happen out the causes of additions in monetary values of rough oil. Either the supply of oil is short or the sudden demand pulls the monetary values higher of it. We know the monetary values of rough oil in old old ages are fluctuating really much higher, the roar in per barrel monetary values causes the rising prices of national and international trade goods. What are the facets behind this theory of rough oil and its storage system?

5.4 Decision

At the terminal the findings prove that, the alteration in rough oil monetary values change the Karachi stock index. It has besides impact on the monetary values of consumer goods and market goods. The alteration in consumer goods monetary values or the causes of rising pricess are due to the addition in fuel cost or in the cost of production, which is impact straight to the monetary values of goods. The kse-100 index besides impact on the monetary values of trade goods although there is no relation in between the consumer points, but the investor ‘s perceptual experiences and the fiscal facet of kse-100 index exist. The attack of this paper is to happen out the relation of rough oil monetary values to the monetary values of other trade goods. The alteration in consumer goods exists due to the alteration in rough oil monetary values. Some clip the stock index does non increase with regard to the monetary values of rough oil, we see this negative relation because of the other unmanageable factors. If we take the all other unmanageable factors as changeless and happen out the consequence, the correlativity in variables is really high. The documents help out the investor ‘s perceptual experiences about market and index. The investors can set their investing programs by the volatility spillover of Karachi stock index and by the monetary values of rough oil. Any manner they are puting in the crude oil sectors or in any other sector of Karachi stock listed company.