Question

How indian stock market affect by foreign countries economy?

Answer 1

Indian economy is increasingly exposed to global markets post liberalization in the early 90s. We are seeing fast economic growth in last few years and as a result we have seen large fund inflows into Indian market from across the world. Most of these foreign funds are large momentum players and their activity in the market results in large volatility in stock markets.

Investment decisions of these funds are driven and depend on the development/events in foreign markets, or their own local markets. As a result, we are seeing our markets are getting more and more integrated with movement in global (especially American) stock markets. Market analysts track and talk about these global events and global market movements very closely.