INSUBCONTINENT EXCLUSIVE:
By Masaki Kondo and Kartik GoyalA shrinking correlation between financial markets in India and those in the rest of the world is one reason
last month, approaching a more than 10-year low of 0.29 set in November
The reading was as high as 0.68 in 2010, data compiled by Bloomberg show
seen less correlation to major global markets for a range of reasons such as the domestic nature of its economy, less sensitivity to the
Emerging Markets Equity in Singapore
manager at Aberdeen Standard Investments in Singapore
rupee, the link has declined from a high reached in 2010
It may drop further after three national exchanges earlier this year decided to cut ties with their foreign counterparts to maximize trading
at home.
The correlation between Indian and global markets was calculated based on monthly changes using a rolling 60-month basis
bonds versus the Bloomberg Barclays Global Treasury Index; and the MSCI India Index of shares versus the MSCI ACWI Index.
To compute the
average correlation of the three asset classes, the currency was given a weighting of 50 percent, while the weighting for stocks and bonds
