Research On International Oil Price Volatility And Spillover Effects On China’s Stock Market

With China’s rapid economic growth, oil imports increases year by year, economicdevelopment is increasingly dependent on oil, the international oil price fluctuations becomeunstable factors of the domestic economy. Oil is a special kind of strategic commodities, withcommodities and financial and so on multiple attributes, so the fluctuation will also quitecomplex. However, with the continuous development of the international financial markets aswell as the oil market and the financial markets ever closer relations, the promotion of futuresspeculation and the dollar exchange rate factors, the financial attributes behind the oil pricesplays a more and more important role in deciding the international oil price, it has importantpractical significance on oil price fluctuation from the perspective of financial. At the sametime,China’s financial markets and the world’s financial markets interact gradually increases,the international financial factors easily affect the stock market in China by way of oil prices.Based on this, we select the fluctuations in oil prices in the financial perspective,designed to go into the details of oil as a special commodity goods, strategic and financialattributes, trying to explore the underlying causes of the rising crude oil prices, to grasp thepersonality characteristics. In qualitative discussion of supply and demand factors affectingthe international oil price fluctuations, we focus on the short-term factors affecting theinternational oil price fluctuations, especially on the financial factors. Grey relational analysismodel was founded to analysize oil price volatility and confirm the financial factors aredominant factor after2002, from a quantitative point of view. On this basis, using VARmodel and GARCH-BEKK model proves that the international financial factors and theinternational oil price interact with each other,then exert one-way spillover effects on theChinese stock market.These results provide the necessary reference and guidance for ourcountry to take measures to buffer at the policy level and to avoid averse fluctuations on the domestic stock market and to maintain domestic oil prices and economic developmentstability..