Energy Market Dynamics and Emerging Equity Markets: Insights from A Wavelet-Based Time–Frequency Analysis

This study explores the dynamic, time-frequency relationship between international natural gas ‎prices and the equity markets of 23 emerging economies across the APAC, EMEA, and ‎Americas regions. Using wavelet coherence analysis, the research examines how market ‎interactions evolve across different time horizons, with a particular focus on major global ‎crises, including the COVID-19 pandemic and the Russia-Ukraine War. The findings reveal a ‎stark bifurcation fundamentally driven by each nation's net energy trade position. For major ‎gas-exporting nations, such as Qatar, Indonesia, and Mexico, a strong in-phase coherence is ‎identified, where natural gas prices act as a positive leading indicator for equity markets, ‎particularly in the medium- to long-term. Conversely, in major gas-importing economies, ‎including China, South Korea, and European nations like Poland, a powerful anti-phase ‎coherence dominates, with gas prices serving as a negative leading indicator, especially in the ‎short- to medium-term. The analysis confirms that geopolitical shocks, particularly the Russia-Ukraine War, significantly amplify these co-movements, solidifying natural gas as a primary ‎channel for financial risk transmission. The study concludes that natural gas plays a strategic ‎financial role, offering predictive insights for risk mitigation and strategic portfolio allocation ‎across emerging markets‎.