S4 E1 : HOW GLOBAL NEWS AFFECTS INDIAN MARKET ( FOMC, CRUDE ETC. )

🤔 Ever wondered why…

- A speech by the US Federal Reserve shakes the Indian stock market?

- Crude oil prices rising in the Middle East affects your stocks in India?

- A war in Europe suddenly causes your portfolio to fall?

Let’s break this down — in simple, clear, and powerful real-world examples.

🌍 The World Is Connected — So Are Markets

Think of the stock market as a giant ocean 🌊. India is one part of that ocean. The US, China, Europe — all are parts of the same water body. If there's a storm in one part, the waves hit every corner.

When big global events happen, investors all over the world react. And their reactions move money — which moves the stock market.

🏦 1. FOMC (Federal Open Market Committee) — Why Indians Care

🧠 What is FOMC?

It’s a group in the USA that decides interest rates for the American economy.

🇮🇳 But why should we care in India?

Because big investors (called FIIs) move money between countries depending on where they get better returns.

  • If FOMC raises interest rates in the US, Indian stocks may fall.

    • Why? Because investors pull money out of India and park it in the US (safer + better return).

  • If FOMC lowers rates, money flows into India, and markets go up.

✅ Example: When FOMC hiked rates in 2022, FIIs sold ₹2.5 lakh crore worth of Indian stocks!

🛢️ 2. Crude Oil Prices — Why It Impacts Everything

India imports 80%+ of its oil. If crude prices go up:

- Transportation cost increases 🚚

- Food and goods prices go up

- Inflation rises 📈

- RBI may raise interest rates

- Companies’ profits shrink

All this = 🟥 Stock Market Fall

✅ Example: In 2022, when Russia-Ukraine war started, crude went above $120. Nifty fell over 2,000 points in a month.

 

💣 3. Wars, Conflicts, and Global Tensions

Markets hate uncertainty. When there’s war or political drama:

- Investors panic

- Money moves out of risky assets

- Gold and USD go up

- Stocks go down

✅ Example: During the 2023 Israel-Gaza conflict, global markets dipped for weeks.

💸 4. Dollar Index & USD vs INR

The Dollar Index (DXY) shows the strength of the US Dollar.

  1. If DXY goes up = INR gets weaker

  2. This affects import costs, foreign investment, and even company profits

✅ Example: IT companies like Infosys, TCS earn in USD. If USD strengthens, their profits go up (good news). But if the Rupee crashes, it’s bad for importers like oil companies.

 

🌦️ 5. Global Recession or Growth Signals

If big economies (like US or China) show signs of slowdown:

  1. Demand for goods drops

  2. Indian exporters get fewer orders

  3. Corporate profits dip

  4. Stock prices fall

✅ Example: A slowdown in China can hit Tata Steel, JSW Steel, or export-based pharma stocks.

📊 6. FIIs (Foreign Institutional Investors) React First

Foreign investors track global cues faster than most of us.

  • When they buy, markets go up

  • When they sell, markets fall — heavily

✅ Example: FIIs often sell Indian stocks even when our economy is fine — just because the US or Europe is in trouble.

 

🧠 Final Recap (Super Simple)

Here’s how global events usually affect the Indian stock market:

  1. If US Raises Interest Rates (FOMC):

    Foreign investors pull out their money →  stocks fall.

  2. If Crude Oil Prices Rise:

    Inflation increases → Stocks fall.

  3. If there’s War or Global Tension:

    Market panic → Stocks fall.

  4. If Dollar Index Goes Up:

    Rupee weakens → Mixed effects on Indian market.

  5. If Recession News Comes from Abroad:

    Exports decline → Indian company profits drop.

💡 Why This Matters to You

You're not trading in isolation.

  1. You're part of a global story

  2. Understanding global news helps you stay calm when markets fall

  3. It also helps you predict smart entry or exit points

This is the real world of investing — and now you understand how it works.