Recent data compiled by high-growth global trading platform Capital.com, revealed a strong correlation between Google search trends and the trading behaviour of its UK clients. The number one most traded market on the Capital.com platform in the first half of this year— the Nasdaq—was also one of the most searched-for terms on Google over the same period. These findings affirm how the news cycle is influencing popular trading decisions among UK traders.

Daniela Hathorn, Senior Market Analyst, Capital.com, said: 

“Our findings show that traders are using a multitude of platforms, including google search engines, to help them decide what markets to trade and when to enter into a position. Mobile technology, 24-hour news channels and widely available information on the internet have made it easier than ever for traders to keep track of events and trade the news.”

According to an analysis of over 7,000 active UK traders in 1H 2023 , a spike in Google search activity for ‘Nasdaq’, ‘Gold’ and ‘Tesla’ corresponded with a substantial rise in the number of trades executed on the Capital.com platform. 

Single-day trading of Tesla on the Capital.com platform jumped by 37% in one day on 16 February (Thursday), the day Tesla announced plans to recall 362,000 US vehicles due to safety concerns. On the same day, Google searches for ‘Tesla’ spiked in popularity to reach 69*. Tesla was among the top-10 most traded markets in the UK on the Capital.com platform in 1H 2023 [see Table below].

Commenting on Tesla’s popularity with UK traders, Hathorn, said: 

“Regardless of whether it is good or bad news, traders expect Tesla to be in the news. When a company dominates the news cycle like this, it results in more price action and potentially more trading opportunities. This explains why Tesla continues to be the most popular stock to trade on the Capital.com platform.” 

Similarly, UK client trading activity across the Nasdaq jumped by 60% in one day on 13 March, the same day Google searches for ‘Nasdaq’ hit its highest peak for 1H 2023. The Nasdaq was the number one most-traded market on the Capital.com platform in 1H 2023.

“Both the Gold markets and the Nasdaq were strong performers in 1H 2023, driven in part by wider news events centred on central bank action and tech earnings.The tech-laden Nasdaq Composite jumped 31.7% in the first half of this year, marking its best first-half performance since 1983. Traders may have been following the news closely to find opportunities to ‘buy the dip’ and profit from the Nasdaq's rally, which was evenly spread across the first half of the year,” explained Hathorn.

Meanwhile, trades executed on Gold markets peaked by over 90% in mid May, coinciding with heavy Google search activity for ‘Gold’ over the same period [ see Chart 1].

“Gold saw increased interest towards the end of 2022 as markets anticipated a recession in the new year. This led to increased safe-haven demand, and despite the economy being more resilient than expected, there have been a few high-impact events which have shocked the markets, including the banking crisis in the US, the drop in consumer prices and expectations for the end of Fed tightening,” added Hathorn.

Responding to clients’ preference for free and easily available news and information, the Capital.com platform is enabled with personalised watchlists, education resources and financial news feeds and alerts. These features help clients trade directly from a news article or watchlist, saving them valuable time.

The analysis of over 7,300 active UK clients looked at the number of trades opened on Capital.com and Google search data to establish a correlation between search activity and trading patterns between 1 January 2023-30 June 2023.

Tabled 1 : Most traded markets on Capital.com in 1H 2023 , in the UK

Chart 1 :Gold markets: Correlation between trading activity and Google search activity

Source: Capital.com and Google Trends, 01/01/2023-30/06/2023

Chart 2: Correlation between trading activity on the Nasdaq and Google search activity

Source: Capital.com and Google Trends, 01/01/2023-30/06/2023