"The stock market is filled with individuals who know the price of everything, but the value of nothing." - Philip Fisher
We all know that the stock market will either rise or fall depending upon the current circumstances. Amidst the Russia-Ukraine crisis, it's only natural for regular investors to be wary of the dangers of inflation. The commodity and energy prices have reached an all-time high, Europe's common currency and stock markets have been hammered low.
The restrictions, limitations and sanctions against Russia from the Western allies have a high chance of creating turmoil in the market. The companies, banks, and investors might just be digging their own graves by taking such a big yet necessary step. Such instances from the past suggest a looming danger of a financial crisis. But you lose some, and gain some, right? Here's a guide to stock market training beginners-
Experts are claiming that there isn't any panic in the market. Sure, there is some uncertainties and confusion about what could happen next, how much will the price rise, and what will be your fate. But there's no reason for you to stress and react or gasp and regret, at least not yet.
People think that it's actually of little use to compare past events with the present crisis. They believe that risk management is way better and more advanced in today's world and much more capital in the system. There might be some sinkholes that could have a domino effect on losses. When this happens, panic and withdrawal of market members are doomed to happen. Simultaneously, stagnant credit and a huge financial emergency will follow the suit.
It triggered some response amount of stress when Russia attacked Ukraine's power plant. Investors started dropping risky assets, banks have become sceptical of lending and collecting dollars. This is further making it quite difficult for others to procure. There is no doubt that Russian assets have steeped low, but the global market is still holding up strong.
When learning how to invest in the stock market in India, whether to thrust your horns up like a bull or claw the market down like a bear, you have to be active and on your feet. This is mainly because any small infliction might have a huge impact.
Let's talk about something that's trending- the rising prices of crude oil. But why? We know that the US has imposed a sanction over the second-largest producer and exporter of crude oil, Russia. This is done to stand in solidarity with Ukraine and all those innocent lives in peril to the Russian invasion.
However, there's something to note here- such a scenario when companies and countries are limiting the usage of Russia, they have to look in another direction. They are looking for a change, an alternative to the commodities once received from Russia. It has the potential to benefit other countries, especially India where the steel and aluminium business industry is booming.
Do you now see what we mean by saying that a small infliction is enough for the market to go in turmoil? However, this isn't to scare you, only to prepare you for the worst.
Let's talk about some numbers. In the UK, their average price of petrol has reached 155p per litre. The growing concern is valid because everyone fears that the price of mundane products will also increase at an alarming rate. Be it petrol, food or heating, the prices were already increasing at a rate faster than what we have experienced in the past thirty years. The Russia-Ukraine crisis is simply fanning the flames at an escalating pace.
We can see a considerable amount of drop in the stock exchanges in France and Germany. In early trading stages, it plummeted to more than 4% and thereafter, became a pair with a drop of 1.3% and 2% respectively.
For the Corporate sector in India, this Russia-Ukraine war has something bad in-store. It could diminish the re-established global demand and boost up the input prices. According to the ICICI securities, we won’t have the oil prices has decreased rather it would stay elevated at a rate of US &90/bbl. in the coming months.
India will soon see a negative effect on its consumption. And a positive response can be witnessed for commodities like steel and aluminium. With the global supply chain disrupted, the risk of inflation is supposed to stay here. The RBI will have then have to reduce liquidity prices and increase the interest rates. This would mean that the Indian Equity will have lower PE valuations.
If you wish to attend one of the stock market training programs in Kolkata, we hope that you find a reliable source for the purpose. It's never too late to start somewhere, but it's also important to understand the market prices and the company's value before investing!