Mumbai to New York: The Global Link
The Indian stock market does not move in a vacuum. It is deeply connected to the US financial system. As a professional trader, you must track the "Global Pulse" every morning before the 9:15 AM bell.
The Dollar Index (DXY) Effect
The DXY measures the strength of the US Dollar. There is a strong inverse correlation between the DXY and emerging markets like India. When the Dollar gets stronger, FIIs (Foreign Institutional Investors) often pull money out of India, causing Nifty to fall.
US 10-Year Bond Yields
Rising bond yields in the US are generally bad for equities. If investors can get 5% risk-free return in US bonds, why would they take risks in volatile stock markets? Keeping an eye on the "Yield Curve" can give you an early warning sign of a market crash.