Tracing Financial Contagion: A Principal Component Analysis of Interconnected Stock Markets (2009–2024)

Tracing Financial Contagion: A Principal Component Analysis of Interconnected Stock Markets (2009–2024) | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Tracing Financial Contagion: A Principal Component Analysis of Interconnected Stock Markets (2009–2024) SathishKumar D, Mr.K.Hareesh, Dr B Sudhakar This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7174403/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This research takes a closer look at the concept of financial contagion, which is all about how market disruptions can ripple across borders, particularly during significant global crises from 2009 to 2024. We employed Principal Component Analysis (PCA), a statistical technique that helps us identify patterns by breaking down complex data, to examine daily return data from four major equity markets: India’s NSE, the Hong Kong Stock Exchange, Japan’s Nikkei 225, and the U.S. Dow Jones Industrial Average. Our results indicate that these markets are becoming more influenced by common systemic factors, highlighting their increasing interconnectedness over time. Importantly, major global events like the European debt crisis, the COVID-19 pandemic, and the conflict between Russia and Ukraine have triggered synchronized movements across these indices, providing compelling evidence of contagion effects (Forbes & Rigobon, 2002 ; Bekaert et al., 2014 ). Management Financial contagion Principal Component Analysis (PCA) global stock markets market interdependence crisis transmission financial crises (2009–2024) NSE Hong Kong Stock Exchange Nikkei Dow Jones Industrial Average volatility spillover systemic risk cross-market linkages Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7174403","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":488353820,"identity":"732601f0-4d57-43a5-8636-d202ff3e5a12","order_by":0,"name":"SathishKumar 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We employed Principal Component Analysis (PCA), a statistical technique that helps us identify patterns by breaking down complex data, to examine daily return data from four major equity markets: India\u0026rsquo;s NSE, the Hong Kong Stock Exchange, Japan\u0026rsquo;s Nikkei 225, and the U.S. Dow Jones Industrial Average. Our results indicate that these markets are becoming more influenced by common systemic factors, highlighting their increasing interconnectedness over time. 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