Stock Market fall
2022 has not shown any signs of market recovery from the fall that started since the last month of 2021. The signs are discouraging for the investors both old and new, the market is at a volatile juncture where any you cannot trust any movement unless there is a sign of stability.
Market indexes have fallen off the grid and the pertaining anxiety related to the pandemic is still playing a part. The outflow of cash from the Indian market resulted in the falling stock market.
Reason behind Stock Market Falling
One of the major fear of the market remains inflation which may affect the stock exchanges around the world to fall. Apart from the same Indian market has always reacted to certain reasons which has affected its stability, some of it being;
Higher Rate of Interest
The previously released rates of interest to stabilise country’s economy are being retracted and the interest rates are rising which has resulted in discouraging investments in the stock market which has higher risk. The higher rate of interest on the other hand has encouraged investments in debt funds and bank deposits, but that still does not make up for the stock market fall.
Dented Profitability
With inflation as a waiting menace, and the increased cost for industries and corporates during the latter part of 2021, businesses went on to report decreased profits. While decreased profits have meant that the corporate earnings have dropped it has eventually resulted in lesser dividend or lower returns for the investors. Hence, this has caused a stock market fall with many investors retracting their investments.
Geopolitical Reason
The rising tension between Russia and Ukraine is one of the major reasons which has affected the recent dip in the Indian market. Given the movement of the troops and events of conflicts across borders have affected the economies around the world. Since US have made its stand clear and many other countries supporting it, the following events may be fateful for the stock market, not just in India but around the world.
Lurking Uncertainty
The uncertainty regarding the new variants that are coming up around the world and the expected lockdown may again push the industries and economies back. This ambiguity has led to a volatile market where investors are playing safe and are withdrawing their investments to counter any untoward situation.
Underperforming New Stocks
The aggressive selling of stocks of relatively new companies in the stock market has greatly dented their valuation and has resulted in a discouraging market trend.