SHARETIPSINFO >> Articles Directory >>Bear Hold on Stock Market Likely to Continue
Stock market is the place where trading of stocks takes place. We have heard about the bull market and the bear market. When the stock market in is in boom or go up we generally refer it as the bull market. On the other hand when the Indian stock market is in downturn we refer it as the bear market. As per the comments of expert, professional and the global recession it seems that the bear hold on stock market likely to continue.
Bull and the bear market
In the bull market the productivity is high, high employment and inflation is low. On the other hand in the bear market there is low productivity, low employment and at the same time high inflation. The stock market is an indicator of an economy. When the stock market is in high it reflects that the economy of the country is a healthy one but if the stock market is in low then it is not a healthy economy. Now as per the recession in all over the world the stock market is continuing the rally of the bear market. And how soon the market will recover is a million dollar question to everyone?
Depends on the psychology
In the bear market the sellers are many and the buyers are less. The market which would be bear one or the bull one is somehow affected by the psychology of investors. The stock market now seems that the bear that gripped the market in 2007 would like to continue for many years. Now nobody is predicting that share market will go up. In this situation we cannot think that corporate earnings will rise in the next couple of years. The current viewpoint of all the expert is that current recession will last as long, which means that there is a chance that GNP will fall and as unemployment could rise to greater level in 2010. But still in country like Brazil, Russia, India and China in this global meltdown still catches the breadth and resume their heady economic growth.
Though global meltdown has affected all the country but still it is expected that India will be able to come up from this situation. But still the global meltdown has significant affect on the global commodities markets especially oil, industrial metals and food. Inflation as well as the growing government deficit around the world will push up the global interest rates. Again the geo-political risks are already become very high and it can be expected continue due to the global meltdown around the world. High inflation, high interest rates and the geo-political risks are carrying a bad news for and likely to depress stock markets in future a lot. Again, most of the upside in the stock market in the recent decade has come from not because of corporate earning but from the multiple expansions only. This is the reason why it is important to know the sensex.
As we know that the general nature of stock market is that it goes ups and down. The market may be a positive for a short period of time but due to the global recession it is likely to be continued for a long period of time. Investors are reluctant to invest in the stock market because the global economic scenario has shaken the mind of the investors. Many well known financial institutions are facing great problem. Even some of them has gone to bankrupt. For e.g. we can take the example of Lehman brothers, American International Group, City group Etc .investors are loosing their faith in the stock market. So, we can rightly say that the bear market hold on the stock market likely to continue for a long period of time.
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