Beware of what you ask for!

I have, after a gap of more than a decade, started writing "research" on the macro aspects of the market. Here is a recent comment I made - in its unedited form:

The Street believes that higher oil prices are detrimental for Indian equity markets. In fact, recent broker reports suggest that if oil prices were to fall globally, Indian economy, and by extension, the Indian stock markets, would rally.

The belief is misplaced – the data does not support the thesis. A look at the graph above reveals that the markets tend to move either independent oil price movements (for example in the first few months shown in the graph above), or in the same direction as oil prices. Clearly, it appears that oil price declines likely happen at a time of reduced economic activity. Consequently any potential savings in import costs is perhaps offset by a more-than-proportionate reduction in output growth, adversely effecting corporate profits. A drop in global prices of crude is certainly NOT what we should be asking for