The Six Times Indian Market Mirrored U.S. Peers
When Indian and U.S. stocks fell and rose in tandem.
India’s Nifty 50 Index has declined 7 percent from its lifetime high as a stock rout in the U.S. triggered a global sell-off.
The Dow Jones Industrial Average declined more than 1,000-points twice this week. Historical data show that the Indian market mirrored its U.S. peer in at least six of the nine routs and recoveries identified by Bloomberg.
Here’s a quick recap of the Nifty moving in tandem with the broader S&P 500 Index:
January 2016
The S&P 500 Index declined on concerns over a slowdown in China, hitting its lowest level since April 2014. The U.S. Index fell 12-percent in January and Nifty mirrored that with a 12.4 percent decline. They recouped the losses in Feb and March.
August 2015
Anxiety over devaluation of the Chinese yuan sent the S&P downhill. The 500 stock index fell 11 percent while Nifty fell over 8 percent in August. The indices recovered in October, with the S&P gaining over 10 percent and Nifty rising 3.5-percent.
January 2014
Emerging markets stocks and currencies triggered a sharp fall in the developed markets. Both the U.S. market and the Indian benchmark fell over 5 percent in January. They were back to their December 2013 highs in less than a month.
October-November 2012
Uncertainty in the run-up to the Nov. 6, 2012 election when Barack Obama faced off with Mitt Romney triggered a correction before the markets rebounded in December 2012. The correction lasted a month with the S&P losing over 5 percent and the Nifty falling over 3 percent. The two benchmarks recovered in November—S&P 500 rose 5 percent and Nifty gained 6 percent.
March-June 2012
Minutes released by the Federal Reserve showed that it will not ease liquidity more, resulting in a near-10 percent fall in the S&P 500 Index and an 11 percent decline in Nifty. They gained 8 percent each during the recovery.
July-August 2011
Standard and Poor’s downgraded the U.S. credit rating from AAA to AA+ for the first time, triggering a stock rout. S&P 500 plunged 17 percent while Nifty dropped 11.5 percent. Nifty gained more than 5 percent during the recovery, lagging a 9 percent increase in S&P 500.
