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Why is Aus. so influenced by Overseas

Discussion in 'General Investing Discussion' started by Johny_come_lately, 25th May, 2010.

  1. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi,

    Why is Australia so influenced by overseas markets? If the American market drops on friday night, Australia will drop on monday. A wiff of a rumour offshore, and down we go. Why does this happen? :confused:






    Johny.
     
  2. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    World's markets are interrelated, so OZ market is not immune to any changes,
    All sort of financial data, incl. psychology of the crowd, is playing an important role in any market move in both directions.
    US market is the biggest and OZ market is considered to be one of the smallest.
    The Australian Stock Exchange had a total market capitalization of $777.7 billion as of October, 2005.
    By comparison, the 'granddaddy' of all stock markets, the New York Stock Exchange, had a total market cap of nearly $13 trillion.

    Breakdown of the Worlds Markets in 2000
    USA 47%
    Euroland 13%
    Japan 13%
    UK 8%
    Canada 2%
    Australia 1%
    Sweden 1 %
    Switzerland 2%
    other markets...
     
  3. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    Also because we are all using the same economic model.

    So when the US or EU model begins showing cracks you don't have to stretch the imagination too far to see those same problems eventually being present in similar economies.

    That's why people keep talking about Greece being the canary in the coal mine.