Coaches Round Table

What is the relationship between one stock market and another foreign stock market?

I'm an Indonesian and I am told that my country stock market going down has something to do with US's stock market going down. Can anyone please help me explain the relationship? Or if this is true at all? Thanks a lot!

Public Comments

1. This is called arbitrage, when stocks get cheaper in one market, investors will not buy in another unless the price is driven down also. There are of course other reasons, the main one is that economies are interrelated around the world and when an economy is sneezing, the neighbor one is in danger of catching a cold. Stock markets rise and fall in "sympathy" with each other, even stock investors can show love ;-)