Has the Indian Stock Market stepped into the bear market and which sector should be on investor’s radar during this period? Let’s discuss this all in this article as we move forward.
What is Bear Market:
- As per Investopedia, A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.
Market Situations across Globe:
- In US Market, the NASDAQ has reported its high levels in November 2021 of around 16,212 levels, which has now fallen to the levels of 12,735 reporting to fall of more than 21% signifying its entry into a bear phase.
- BOVESPA, the index of Brazil’s Stock Market has fallen by around 15% from its high levels of 1.31 Lakh to 1.1 Lakh. This index is just a little percentage away from entering into the bear phase.
- The S&P 500 and DOW JONES has fallen by around 13% and 10% respectively from their peak levels.
- In the context of the Indian Stock Market where the benchmark index- SENSEX has touched the peak levels of 62,245 in October 2021 which has not fallen to the levels of around 53,000 reporting a fall of around 14% from the peak. While the NIFTY has gone down from the levels of 18,604 to around 16,000 amounting to a fall of around 13.9%. Here both the indices of the Indian Stock Market have not entered into a bear market.
- Moving ahead to the European Market, DAX, the index of Germany Stock Market has gone down from 21% from its peak levels, EURO STOXX 50, another index of Europe Market has also reported a fall of around 21%. CAC 40, the benchmark index of France has also gone down by around 17% from its peak. FTSE 100, the index of Britain Stock market has also fallen by around 9.7% from its peak.
- HANG SENG, the index of Hong Kong has corrected heavily by 33% from its 52-week high levels of 31,183 to the level of 20,766.
- Index of South Korea, KOSPI has corrected by 21% from June 2021 levels of 3,316 to 2,622.
- Nikkei 225, the index of Japan has almost entered into the bear phase as this index has fallen by around 19.5% from its peak levels of 30,796 to the levels of 24,791.
- In the context of Asian Markets, Hong Kong, South Korea, and Japan appears to be in the bear phase, while India has still not entered the bear market.
Where to Invest in Falling Stock Market?
- In the 9MFY22, the Oil Import Bill of the company is around $81 billion or Rs. 6.07 Lakh Cr. (1$-Rs. 75).
- With rising crude prices, the oil import bill can rise to $110 to $120 billion by the year-end.
- The rising crude oil price which is mainly being caused due to geopolitical tensions between Russia and Ukraine provides a big opportunity for the ‘Clean Energy, Green Energy Initiative’ and Electric Vehicle (EV) Industry.
- Transportation is the major industry that consumes the highest fuels where Electric Vehicle is a great option on the front of usage of oils, and herein to support EV, there is a need of Clean Energy & Green Energy.
- Developments of the current geopolitical situations between Russia and Ukraine can now escalate the growth of the Clean Energy and EV Industry in the country.
What Should Investors Do?
Europe Markets appear to be in the bear market situation as per the definition. While in Asian Markets, the developed nations like Japan, South Korea, etc. have entered into the bear phase, India has not entered into the Bear market situation.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.