Do global stock markets really move together?


Intuitively we know that global equity markets roughly move together. This tweet by Samir got me curious enough to explore the extent of that relationship and to look for takeaways if any. The post was published on

Link to post:

Would love any comments and feedback from this forum.

This has a better table on a shorter time frame. Historically on a day to day basis, we have strongest correlation with Germany(DAX). Day traders pay close attention to European market opening time because at times you can have sudden volatility or trends developing.

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@anni23 this is very cool. thanks for sharing.

10 Year chart below shows that our market is largely correlated with S&P 500 and ony diverges when there is some India specific event like general election or demonetization etc. Whenever, our index moves away from S&P500, sooner or later it catches up.


Source: Google Finance

You will get similar charts if you compare other global indices with each other. No wonder so many people watch US markets and Fed as it sets the tone for markets around the world.

Our small and mid cap indices are not so highly correlated so that’s where there can be opportunities for value hunting.