Sensex: 17 Years of Mimicking NASDAQ

This is a little alarming. I collected the data for NASDAQ and Sensex for 17 years and tried to find out how and if they have any considerable impact on each other. I always knew that global cues have some impact on Sensex but I was caught off guard with the findings of the data. The table below shows how perfectly Sensex mimics NASDAQ.

They are almost like mirror images of each other. The trend is for Year-on-Year percentage increase in the indices since 1992. In fact the coefficient of correlation between them stands at 0.5065. This just shows how much impact NASDAQ really has on the Indian Sensex.

This augmented my curiosity. I collected the data for all Global indices where Indian companies were listed and tried to find if there is any significant correlation between the Indian stock exchange and the Global stock exchanges such as those of London, Luxembourg, New York, Dubai, HongKong and others. The table below shows the correlation between all the companies in Indian stock exchange and those of the above mentioned Global stock exchanges based on Equity, Sales, Net Profit and Market Cap.

The findings suggest that HongKong has the highest impact on Indian stock exchange with a correlation coefficient of 0.98 followed by London at 0.97 and NASDAQ at 0.95