Global Clue of International Exchanges on SENSEX and NIFTY for Portfolio Formulation under International Diversification Strategy

Abstract

International diversification is most challenging when a high-net-worth individual wants to invest in different markets around the world. The current study aims at correlating the above-said problem in order to know the impacts of international indices on NIFTY and SENSEX. The results of the study signify that, there is substantial integration between Indian and International exchanges. The study reveals that Indian Stock Exchange Indices NIFTY and SENSEX along with American Stock Exchanges of Brazil, USA, Mexico and Canada, Asian Stock Exchanges of Malaysia, Hong Kong, South Korea, Japan has a very low correlation and less impact on each other, where a high-net- worth individual can construct a well-diversified portfolio consisting of stocks from those selected Indices.