Correlation between Indian and US markets hits 17-month high, data show

Stocks in India are moving in tandem with their US peers at the fastest rate since early 2021, with a 30-day correlation coefficient measure between the NSE Nifty 50 and S&P 500 indices recently hitting 0.68 out of 1.

India’s blue-chip gauge is up almost 5 percent this month, compared with 4.6 percent for the S&P 500 and 0.33 percent for the MSCI Asia Pacific, the latter weighed on concerns over China’s economic growth and Covid-19 balance sheet became.

The softening inflation outlook – particularly fueled by energy – and the Fed’s rate hikes could be connecting points as foreign institutional investment outflows from Indian equities ease in July.

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