Bear and Bull Markets | 13 Mar 2020

Recently, the many Indian indices including NSE Nifty index have entered into ‘bear market’ territory in the backdrop of the declaration of the coronavirus outbreak a pandemic by the World Health Organisation (WHO).

A bear market refers to the market where share prices are continuously declining.
Its downward trend makes investors believe that the trend will continue, which, in turn, perpetuates the downward spiral.
It is considered riskier to invest in a bear market, as many equities lose value. Thus, most investors withdraw their money from the markets.
During a bear market, the economy slows down and unemployment rises as companies begin laying off workers.

A bull market refers to a market that experiences a sustained increase in market share prices.
It ensures investors that the uptrend will continue over the long term.
It signifies that the country's economy is strong and employment levels are high.