Question

International Financial Markets – how do you feel about the global financial markets activity. Pick a country outside the USA and briefly discuss the stock or bond market conditions in relation to the US markets and global.

Answer 1

We have selected the Indian stock and bond market.

There is a a striking correlation between financial markets in India and that in USA.

NASDAQ is one of the biggest stock exchange in the world. Many companies registered over NASDAQ are also registered over many global indexes. Apple, Google, Microsoft etc are the starters of the list who are present across globe. Similarly many companies listed over NIFTY (Indian stock exchange) are also present in USA registered as the affiliate of NIFTY and business centered over USA. ICICI, Reliance, Tata, Infosys, Wipro, Sunpharma etc many are in List.

Global companies falling prices in one stock exchange affect the other part of stock exchange.

Stock market in India is currently more vulnerable than any other stock exchange in the world. Reson being many Indian companies stocks are listed in other stock exchanges as affiliates. Or its ADRs or GDRs are listed in the stock exchange.

Recently, Moody’s upgraded the Government of India’s local and foreign currency issuer ratings to BAA2 with a stable outlook from the lowest investment grade rating of BAA3. The rating agency acknowledged the ongoing structural reforms in the economy, which are expected to foster the potential growth in the long term.

Currently, the global trade war going on between USA and China, rise in crude prices are the main reasons for high fluctuations in the stock markets all over the world, mainly the NASDAQ and NIFTY.