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Interlinkage of the International Stock Markets
Capital market investors devoid of sufficient investment opportunities in the domestic market look forward to investment in the global markets, to seek the additional benefit of the global diversification. Globalization, liberalization, financial reforms, swelling multilateral relations among the world countries, massive development in the information technology and communication systems and ever-rising trade between the nations, signify the integration of the world markets especially the capital markets. This research work focuses on examining the Interlinkage between the stock markets of the world by applying the Johansen (1988) cointegration framework on the world’s twelve renowned stock price indices belonging to India, US, UK, Singapore, France, Japan, Germany, Brazil, Russia, China, Hong-Kong, and Canada. The study could not validate the strong presence of the Interlinkage among the stock markets of the world.
Capital Market, Cointegration, Diversification, Interlinkage.
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