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Important Facts For Prelims

Bear and Bull Markets

  • 13 Mar 2020
  • 1 min read

Why in News

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).

Bear Market

  • 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.

Bull Market

  • 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.


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