In the past few days, the Indian Stock Market has witnessed a sharp fall and has remained volatile. What are the reasons behind this market fall and is the bear phase ahead in the market? Let’s discuss this in this article as we move forward.
Is Current Stock Market Fall Indication to a Bear Market Rally?
- Indian Stock Market has gone down from the high levels of 18,600 to the levels of 15,100 in the recent past amounting to a fall of around 19%. There was a fall of more than 20% in some of the stocks, but on the broader level i.e., in the large-cap category, the Indian Stock Market has not witnessed any evident fall.
- In the United States of America (USA) too, the broader index- Dow Jones has not fallen by more than 18%-19% from its high levels. While S&P500 Index and NASDAQ index have gone down by more than around 24% and 35% respectively. As per the fall of this percentage level, it is clear that these indices went into the bear phase.
- The 52-week low level of Nifty 50 is around 15,183 which is currently hovering at the level of 17,600 amounting to a rally of 16% from 52-week low levels.
- While the Dow Jones index is currently trading at around 31,656 levels and has amounted to a growth of 6.8% from the 52-week low levels of 29,653. Whereas S&P 500 has shown a rally of around 8.2% from its 52-week high levels.
- The Rally behind indices is due to the downward trend of inflation figures in the USA and India as well.
- The fall in the inflation figures is due to a fall in the crude oil prices which have fallen sharply from peak levels of $139/barrel to $94/barrel currently.
Why Stock Market is Falling?
- Changes of aggressive interest rate hikes in the USA.
- Fed Chairman Mr. Powell indicated an aggressive interest rate hike call to bring inflation to the 2% level at Jackson Hole Conference.
- India reported GDP growth of 13.5% in Q1FY23 which was lower than the estimates of RBI of over 16%.
What Should Investors Do?
Amid this market condition, a retail investor who has a long-term approach then one should not be worried about short-term hiccups in the market. The investor must follow a staggered manner of investing and should try to accumulate good stocks during such a period.
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.