Oil and Nifty

Oil and Nifty: People do not fail to give up writing about this relationship without studying history of Macro trends. Its sounds very nice in a News story to say that falling Oil is good for India's deficit and will boost the stock market. Or that rising Oil prices will crash the economy. In 2001 I made a forecast that India started a 10 year bull market. In 2003 I noted that Oil will hit 35$ in the coming months. The Institutional head of research got back to me saying that if that was true India would 'Shut Down'. Oil went to 140$ and Nifty to 6000. This chart shows in aggregate what transpired between these two misunderstood friends during the 13 year time horizon from 1997. Now apart from some short term lead lag effects at the tops and bottoms mostly I would say the two move in the same direction.