Abstract: Global crude oil price volatility plays a crucial role in determining the macroeconomic stability of oil-importing nations like India. Being one of the globe's biggest consumers and importers of crude oil, the financial markets of India, especially benchmark indexes like the Nifty 50 and Sensex, are extremely sensitive to any movement in global oil prices. This research examines the dynamic relationship between global oil price directions and the performance of Indian stock markets over a period of ten years from 2015 to 2025. With a quantitative research design, the study uses secondary data from OPEC, Yahoo Finance, NSE, and BSE. Correlation and regression tests are employed to determine the strength, direction, and magnitude of the relationship between crude oil price movement and stock market returns. The study further explores sector- specific reactions—especially in oil-high sectors such as aviation, transport, and manufacturing—while considering investor sentiment and market volatility. The literature review covers more than 15 domestic and international studies and identifies how previous oil price shocks, especially those that are negative, have tended to have a greater effect on the markets. Most previous studies, however, have ignored recent macroeconomic disturbances like the COVID-19 pandemic, Russia- Ukraine war, world inflationary pressures, or OPEC+ policy changes. This research bridges the gap by incorporating the latest data and wider geopolitical background. Empirical evidence indicates that increasing oil prices put downward pressure on Indian equity markets by fueling price rises, diminishing corporate profit, and depreciating the rupee—factors that combine to erode investor confidence and discourage foreign institutional investment. Notably, some sectors, such as energy production, might be positively affected by price increases, which represent a dual- effect situation requiring sector-specific investment models. This study makes a valuable contribution to scholarship and policy debate by demonstrating how emerging economy financial markets are transferred global commodity volatility. In addition to affirming the Indian stock market's sensitivity to oil price shocks, the study offers insights for policymakers, corporate strategists, and investors. Finally, the study provides actionable advice on how to manage risk and develop robust investment and economic policy.

Keywords: Crude Oil Prices, Oil Price Volatility, Indian Stock Market, Nifty 50, Sensex

Downloads: | DOI: 10.17148/IARJSET.2025.12755