Examining the Connections between the Nifty 50 and other Emerging and Developed Global Stock Markets: An Econometric Modeling Approach

This paper aims to examine the connections between the Nifty 50 and other emerging and developed global Stock Markets viz. Jakarta Price, Korea Composite Stock Price Index (KOSPI) and Moscow Exchange (MOEX) Price. Financial markets across the world have become increasingly integrated due to globalization. Understanding these connections can help investors and policymakers comprehend the degree of interdependence and integration between the Nifty 50 and other global markets. Therefore, an empirical investigation has been conducted to determine the cointegration and causality between the macroeconomic variables and the Sensex using Johansen’s cointegration and Granger causality techniques. Monthly data points spanning a period of one year starting from 2022 to 2023 have been used for empirical investigation. Empirical results of the cointegration technique reveal no cointegrating equations between the macroeconomic variables. The results of the Granger causality reveal the unidirectional relationship between the Nifty 50 and Jakarta Price as well as the NIFTY 50 and KOSPI Price and MOEX Price.