Processing .....please wait.. 
The article has been forwarded.... 
Sensex now leads tango with Dow
By siliconindia
|
Thursday, 27 December 2007, 16:49 IST
New Delhi: A study on the directional movement of Dow Jones Industrial Average and the Sensex shows that unlike the past where the Sensex had been following the Dow Jones, it has become more of a two-way street now, with the U.S. markets often following the Indian trends. The study was done by the Economic Times daily.
It has become more marked over the last one quarter, from the time when the US Fed cut interest rates for the first time since 2003, with the U.S. markets following the Sensex more closely than the other way round. Out of the last 73 odd trading sessions, Dow Jones led Sensex in 33 days while Sensex showed the direction to Dow Jones over 48 days
Over a longer time period, the number of days when the Dow reflected the movement of the Sensex is more. Out of the 265 trading days Between January 1 and December 14, the Dow Jones showed the direction to Sensex for 128 trading sessions, while it followed the movement of the Sensex on 137 trading days.
"This is due to the fact that Sensex is following Asian indices more closely," Says Karvy Stock Broking vice president Ambareesh Baliga. This implies it is the Asian cues to watch out for and these indices are boldly getting reflected on the movement of Dow Jones index.
In contrast, of the 250 odd trading days in 2006, Sensex traded in the same direction as that of Dow Jones in about 130 days. The Dow Jones directionally followed the Sensex in about 120 days.