ABSTRACT:
The outbreak of COVID 19 in late 2019 triggered a global pandemic that significantly impacted economies and financial markets worldwide. This study explores the asymmetrical relationship between oil prices, gold prices and SENSEX before and after the COVID 19 pandemic. The study uses Non-Linear Auto Regressive Distributed Lag Model (NARDL) to capture the dynamic linkages and assess the long run and short run relationship between these variables. The empirical results for the pre-COVID-19 period indicate a cointegration relationship between gold prices, oil prices, and stock prices. In the long run, only one lag of SENSEX had a significant impact on the current value of SENSEX, while in the short run, a decrease in gold and oil prices had positive impacts on SENSEX. The long-run analysis revealed that, even after COVID-19, only one lag of SENSEX had a significant impact on the current value of SENSEX. In the short run, an increase in gold prices negatively affected SENSEX, while a decrease in oil prices had a positive impact. The study contributes to the existing literature by focusing on the dynamic linkages and asymmetric relationships between gold prices, oil prices, and stock market prices. The use of the NARDL model allows for understanding of the differential effects of macroeconomic variables on stock prices. The findings emphasize the importance of considering asymmetry in the relationship between these variables, providing valuable insights for investors and policymakers.