- What is share market?
- Everything about sensex & nifty- what are stock market indices?
- 23 must know terms for investors in stock market
- Stock market participants & financial intermediaries
- What is market capitalization?
- What are initial public offerings?
- What are the stock market timings in India?
- What is a ‘BULL’ & ‘BEAR’ market?
- Why do stock prices fluctuate?
What is a ‘BULL’ & ‘BEAR’ market?
If you’re thinking about investing in stock markets, then you might have heard these two terms ‘Bull markets’ and ‘Bear markets’
You might have also heard from many experts on the news channel talking about being bullish or bearish on certain stocks.
So, what is it exactly?
A bull market is when investors and traders in the market are optimistic (positive) about the rise in the prices of the shares. In stock market, bull means ‘tezi’.
During a bull market, everything in the economy is going right on track like the growth in GDP, increase in employment rate, growing profits of companies, good infrastructure which ultimately leads to rise in price of stocks.
From the above image you can see that Sensex was in a bull run for about 5 years from April 2003 to January 2008 as it increased from 3000 points to 21,000 points.
A bear market is when the investors and traders are pessimistic (negative) about the rise in the prices of the shares and expect the prices to fall.
In stock market, bear means “mandi”. During a bear market, economy is not in a great shape. There are fewer jobs, inflation, companies’ profits decline etc. Due to such situation’s investors are not confident about their investments and start selling them which leads to a fall in share prices.
From the above image you can see that Sensex was in bearish mode for 2 years from November 2007 to July 2009 as it fell from 20,800 points to 8,000 points.
Examples of bear market in India are the stock market crashes of 1992 and 1994 and the dotcom crash of 2000
Bull and bear markets are named after how each animal attacks its prey. A bull usually drives it horns up in the air while a bear swipes it paws downwards upon its prey.