No matter how many times you have opted for a course in an institute that offers stock market training for beginners, the market's current condition must have moved you. According to the recent reports, in the middle of the Ukraine crisis, Nifty has surrendered its 200-DMA. This particular move has drastically affected the entire structure of the market. According to expert analysts, 16900-17000 is a crucial resistance zone.
The geopolitical tension between Ukraine and Russia has affected many things and emotions around the world. One of those areas affected is the stock market. As the issue between the two countries became the center of attention, the investors' sentiments were spooked by Russia's military operations. Equity markets suddenly dropped worldwide as all the investors turned risk-averse.
Popular benchmarks of the Indian stock market, like Sensex and Nifty, dropped by a substantial rate of 3.4% and 3.6%, respectively. The smallcap and midcap dropped to a maximum speed of around 5.3% even in the broader market.
Another thing that was gravely affected by geopolitical concerns is oil. The oil price has gone up to an all-time high of around 100 dollars. Commodity prices have skyrocketed immensely after the crisis. According to the experts' prediction, even in the coming weeks, the markets will remain volatile because of geopolitical developments. They feel that during this period, the traders are going to keep a close look at the changes in the market.
According to popular predictions, based on past similar occurrences, Nifty is expected to correct 31-37 percent in the bull market. Accordingly, after the bottom formation, the recovery after a war crisis is supposed to take around four-six months, and in case of momentous events, it generally takes a year.
The brokerage has remarked, "We recommend investors to ignore the noise and stay put with their current investments. As a fund house, we plan to deploy cash strategically and use the current dip to buy high-quality stocks in a staggered manner. We recommend our clients to do the same, as it said in times of war, 'do not let a good opportunity go begging'."
The recovery that the Indian markets have experienced is widespread and has taken place in various sectors. The smallcap index has risen by 4.07 percent, and the mid-cap has increased by 4.08 percent. BSE metal has jumped around 4.7 percent. Additionally, RIL traded with a gain of 1.6 percent, Tata Motors by 7.96 percent, HUL and HDFC bank at the rate of 2.2, and TCS by 3.4 percent.
Analysts are of the overall opinion that the rally will not last very long, as the price of oil is still above the 100 dollars for a single barrel. Moreover, the Russian invasion's effects on Ukraine are still at their full force. They believe that supply disruptions will continue, and the commodity prices are going to remain high.
According to a stock market analyst, the recovery that Nifty and other stocks have made is immensely fragile. He feels that sentiments will be hit if the war is prolonged any further. He feels that Indian markets are currently following the global trend because the market is nothing less than a minefield right now.
As briefly discussed in a previous section, the best way to understand how much time Nifty will require to recover after the Russia-Ukraine crisis is to assess some of the past similar occurrences that Nifty has recovered from.
After the stock market drop during COVID, Nifty faced a considerable decline. It tumbled down at a rate of around 38 percent from its high of 12,363. It was very soon reported to have recovered by 18 percent.
This was, however, not the only instance when Nifty experienced a steep fall. There are around 18 examples, where Nifty corrected excess of approximately 18 percent. The recovery-to-correction ratio for Nifty has remained between a low of 2.6 times and 3.7 times. Therefore, to predict based on past experiences, Nifty should take six months to recover fully.
You must have already concluded from the above article that no matter how big a name is, its stock is never secure. You cannot just decide to invest money in the stocks of a multi-million dollar brand and feel confident that stock prices will not fall.
With the market, you never know when a crisis will occur, and the whole market will come crashing down. Thus, you must never invest your hard-earned money until you have proper knowledge about the same. Make sure you check out the best stock market training programs in Kolkata before investing.