The global stock market is in for a rough ride this year, according to analysts.
The index is up by over 20% since the election of Donald Trump in November, and is set to trade at a record low.
Investors have been expecting a big correction in the stock market since then, but so far it has not materialised.
Instead, analysts say the market is headed for a much smoother ride, as the new administration will not try to force major corporate cuts.
“The market has been trading at historically high levels for the last couple of years and this year it has seen a dramatic improvement.
The markets fundamentals are strong and the fundamentals have improved so far,” said Kunal Mehta, head of equity research at UBS.”
While we don’t think there is going to be any drastic changes, we would like to see that trend continue, as that will help bring investors to bear.”
But the markets volatility has also contributed to the slowdown in China.
Investors in China have been hit by a weak yuan and a strong dollar, and this has pushed up the value of the country’s currency.
The value of China’s currency has also risen as the country has cut spending and increased spending to prop up the economy.
“A lot of the gains in the Chinese stock market have been from the strengthening of the yuan, but that is not enough to sustain investors’ confidence in the long term,” Mr Mehtal said.
“With the yuan weakening, and investors wanting to hold onto their dollars, the market will also be under pressure to hold the yuan as high as possible.”
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