Title: The Impact of Commodity Prices, Interest Rates and Exchange Rates on Stock Market Performance in selected Asian countries
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Universiti Malaysia Sarawak (UNIMAS)
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This study investigates the impact of key macroeconomic variables, namely commodity prices, interest rates, and exchange rates on stock market performance across ten selected Asian countries: Malaysia, Singapore, Hong Kong, Thailand, Indonesia, the Philippines, Vietnam, Taiwan, South Korea, and Japan. These countries represent a diverse mix of economic structures, including resource-dependent, export-driven, and service-oriented economies. Using a panel data regression approach over a ten-year period (2014–2023), the study examines how fluctuations in crude palm oil, crude oil, gold prices, central bank interest rates, and exchange rate movements affect the primary stock indices of each country. The analysis incorporates control variables such as inflation, real GDP, and foreign direct investment (FDI) to improve model robustness. The empirical findings reveal that three macroeconomic variables, namely CPOIL, GOLD, and IR significantly influence stock market performance, though the magnitude and direction of their effects vary across countries. Commodity prices were particularly impactful in resource-exporting nations like Malaysia and Indonesia, while interest rates showed strong linkages with stock market movements in financially integrated economies such as Hong Kong, Singapore, and South Korea. The model achieved a high coefficient of determination (R² = 0.9887), indicating that the selected variables collectively explain nearly 99% of the variation in stock market performance. This study contributes to the literature by offering a comprehensive, multi-country analysis that captures both cross-sectional and temporal dynamics within the Asia-Pacific region. The findings have practical implications for investors seeking to manage macroeconomic risks, policymakers aiming to stabilize financial markets, and researchers exploring regional financial integration. By addressing existing gaps in comparative macro-financial analysis, the study enhances understanding of how global economic shifts transmit into domestic financial systems in Asia