How Important is China to World Stock Markets?

As the fasted growing economy in the world China is important but one must keep some perspective. China accounts for only 1.48% of FTSE All World Index, a measure of global stock market capitalization. The United States is still the 100 pound gorilla accounting for 41% and the rest of the world ex China and the US 57.52%.

The other thing to keep in mind on the Chinese stock market is that it, for all intensive purposes, is closed to the rest of the world. Domestic trading fuels the Chinese market giving a casino like atmosphere where high volatility is the order of the day.

So does China matter. Sure but if China sneezes it does not mean the rest of the world will catch a cold.

This entry was posted on 20. August 2009 at 05:55 and is filed under Markets. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.