Dollar vs Sensex Correlation for Indian Stock Market

It is interesting to note that US dollar and Sensex move in an inverse relationship and we have been seeing the same for past three weeks. To make it clear to a beginner ins tock market or Forex market, one can understand the dollar index as performance of the dollar against a basket of six major currencies

As we can see dollar index has bounced from a recent low of 72.93 on April 29 to around 76 levels and due to inverse relationship during the same period, the Sensex has fallen by close to 6%. Due to this reason Foreign institutional investors (Fiis) have sold Indian equities worth $1.74 bn in May.

Now we can hope for a recovery as dollar which was weighing heavily on equities and commodities eased to 75.26 from the recent high of 76.2 bringing relief to commodity related sectors across Asia and thus relief rally is in sight and thus get benefitted with daily free share market tips and make money making a daily habit.