Why does Indian market depend on US stock market?

Our INR is a comparatively weaker currency. India exports more to the US than what it imports from the US. This is nothing but depreciation in the value of INR. Thus, higher rates can adversely impact their profitability leading to a short-term downfall in the market.

How is Indian market related to US market?

In constant currency terms the Indian Markets have lagged the US markets as the INR depreciation has impacted the performance of the Indian Markets negatively. The lower the correlation between Indian and US stock market, higher is the diversification providing stability in a portfolio.

How is the Indian market different from the US market?

Volatility. When compared to Indian markets, the US markets have been less volatile in the long run. Indian equities have shown great volatility, with bigger swings in returns over the years. This is another reason experts recommend diversification when it comes to investing, since risks are spread out and diminished.

Which country stock market affects Indian market?

Indian markets were found to be most strongly correlated with Hong Kong markets. On an average, a 10\% rise (or fall) in the Hang Seng results in a 6.5\% change in the Sensex. The second highest correlation was with the South Korean index Kospi.

How does international market affect Indian stock market?

When there is global recession these Indian companies cannot sell their products in international market. If there is a plummet in international market, the revenue of such company decreases and this leads to investors anticipating a ripple effect. This will result in a decline in the country’s stock exchange.

How will foreign exchange market influence the Indian market?

The fluctuations in the value of the dollar against Indian rupee will affect such trade or stocks investment. If the dollar makes strong gain against the Indian rupee, demand for imports from India would probably rise. This is because the US buyers would be paying less for them.

Is Indian stock market reliable?

Higher returns To answer the question at large: yes, it is safe to invest in the Indian stock markets; however, as with all investments, one must research and plan accordingly. Without proper research and planning, investors tend to make unwise decisions that eventually lead to losses.