Stock Market Integration Between Developed and Emerging Markets: Evidence from the EURO STOXX 50 and NIFTY 50
Deepak1, Amit Kumar Nandal2
1Mr. Deepak, Department of School of Commerce and Management, Om Sterling Global University, Hisar (Haryana), India.
2Dr. Amit Kumar Nandal, Department of School of Commerce and Management, Om Sterling Global University, Hisar (Haryana), India.
Manuscript received on 23 March 2026 | First Revised Manuscript received on 26 March 2026 | Second Revised Manuscript received on 20 April 2026 | Manuscript Accepted on 15 May 2026 | Manuscript published on 30 May 2026 | PP: 25-32 | Volume-6 Issue-1, May 2026 | Retrieval Number: 100.1/ijef.A265006010526 | DOI: 10.54105/ijef.A2650.06010526
Open Access | Editorial and Publishing Policies | Cite | Zenodo | OJS | Indexing and Abstracting
© The Authors. Published by Lattice Science Publication (LSP). This is an open-access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: In today’s era, every country is aligning itself with a regional bloc to increase its trade. India, with 1.4 billion people, offers a lucrative market for other countries. Everyone wants to make trade ties with India. Recently, in January 2026, a mother of all trade deals wassigned between India and the EU. In light of all these developments, this paper sought to explore the interlinkages between the Indian and EU stock markets. Here, we tried to identify the interlinkages in front of the return generated by these two blocs of the stock market over the period. The present study examines the interdependence between the NIFTY 50 and the EURO STOXX 50 using daily data from January 2000 to December 2025. To ascertain the basic characteristics of the data, descriptive statistics and graphical analysis have been conducted. These tests serve as a torchlight for further analysis. The study employs the Augmented Dickey–Fuller and Phillips–Perron unit root tests to check the stationarity of the data. The unit root tests reveal that the logarithmic price series for both indices are nonstationary in level but stationary after dif erencing, indicating that the variables are integrated of order one. This is completely in line with the descriptive statistics and graphical analysis. Johansen cointegration analysis and Granger causality testing is performed to understand the long-run and short-run behaviour of the two indices. The Johansen cointegration test found that the two markets do not move together. At the same time, Granger causality indicated unidirectional causality from India to the EU. We found that only the EU has a significant influence on the Indian stock market.
Keywords: Stock Market Integration; Financial Interlinkages; NIFTY 50; EURO STOXX 50; Cointegration; Granger Causality.
Scope of the Article: Finance: Currency, Assets, and Liabilities, etc.