Brazilian Stock Market and The Oil Price: An Investigation Using the Svar Model

This paper seeks to analyze the effects of fluctuations in the price of Brent oil on the performance indicator of the Brazilian stock market, the Ibovespa index –. We used a structural vector autoregression model (SVAR) with monthly data on industrial production, exchange rate, Ibovespa, and oil price from January 2002 to December 2021. According to the results from variance decomposition, shocks in the investigated variables impact the stock exchange. Furthermore, the results of the impulse-response functions suggest a highly significant reaction by the Ibovespa to positive oil price shocks, exchange rates, and industrial production.