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When China catches cold, Indian markets sneeze

By Samie Modak
January 05, 2016 11:22 IST
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Experts said fall in China markets often triggers a risk-off trade among investors, as it is the world's second-biggest economy and global growth engine. 

Sharp swings in the Chinese market were a norm last year. 

Worryingly, the Indian markets have been a hostage to declines in neighbouring nation's stock markets.

Shanghai Composite index fell three per cent 24 occasions in 2015.

The Indian market ended with losses on all but two corresponding dates.

Positively, however, the cut in Indian markets hasn't been equally deep, as domestic indices fell three per cent or more only on one occasion in 2015.

On August 24, 2015 when China markets posted 2015's biggest single-day fall of 8.5 per cent, the Sensex fell nearly six per cent.

Experts said fall in China markets often triggers a risk-off trade among investors, as it is the world's second-biggest economy and global growth engine.

Beyond sentiment, however, India and China stocks are structurally different and hence not so much directly interlinked.

In 2014, Chinese ended with nearly 10 per cent gains, despite coming off over 40 per cent from its peak.

India on the other hand ended with five per cent losses.

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Samie Modak
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