Share Market Tips: The recovery in the indices was very fast. The BSE Sensex was at the level of 52,843 on March 7. It jumped 5.12% to 55,550 on March 11. The BSE midcap sach was at the level of 22,109 in March, which jumped 5.43% to 23,309 points on March 11.
In the last three years, the number of Demat accounts in India has doubled. In March 2019, there was 3.6 crore Demat accounts in the country. This number has gone up to 7.7 crores by November 2021.
Demat account is needed for investment in stock markets. These figures of Demat accounts in the nation show that a big number of new investors have come out to make profits in the stock markets.
But are they really earning profits? What occurred in the stock markets in the last few days has alarmed investors. The Russia-Ukraine War has dusted off stock markets around the world. When the money of their hard-earned money started falling, the new investors who entered this market understood what the risk in equities is.
The major indices BSE and NSE tumbled more than 7.5% between February 24 and March 7 on symbols of the Russo-Ukraine war, skyrocketing crude oil prices, rising inflation, and disruption of the international supply chain. Yet, after the talks between Russian and Ukrainian officers, there has been a wise recovery in the indices during the last four trading sessions.
Discover how many indices have fallen
The BSE Sensex was at the level of 57,232 on February 23, which dropped by 7.67% to 52,843 points on March 7. The BSE Midcap was at the level of 23,558 on February 23, which plunged by 6.15% to 22,109 points on March 7. With this, the BSE Smallcap was at the status of 26,946 on February 23, which dipped by 4.69% to 25,682 on March 7.
Huge withdrawals of foreign investors
Foreign investors are frequently making withdrawals from the Indian markets. Foreign investors began selling in the Indian markets as the US Central Bank Federal Reserve revealed signs of an increase in interest rates and the return on bonds increased.
The Russia-Ukraine war acted as if it counted fuel to this fire. From February 24 to March 10, foreign investors (FPIs) sold Indian shares worth Rs 55,127 crore. At the same time, since January 1, foreign investors have sold their holdings worth Rs 1,10,063 crore.
Recovery session begins
The recovery rate in the indices was quite quick. The BSE Sensex was at the level of 52,843 on March 7. It jumped 5.12% to 55,550 on March 11. The BSE midcap sach was at the level of 22,109 in March, which bounced 5.43% to 23,309 points on March 11. Apart from this, the BSE Smallcap was at the level of 25,682 on March 7, which jumped 5.68% to 27,141 points on March 11.
The market has also thrown a sigh of relief from the good results for the BJP in the assembly elections. These results have indicated the BJP’s strong position in 2024. The market feels the possibility of long-term political stability will encourage the Centre to take tougher decisions. This can help the economy in the prolonged term.
Good healing in crude oil
Along with equity markets, crude oil prices have also made a good recovery. On March 8, Brent crude was at a level of more than $132 a barrel. Now the price of crude oil has come down to below $110 per barrel. This fall in crude oil prices has brought much relief to the global markets.
Smart strategy for you
Due to the war, the oil import bill will not only increase but also the inflation will increase. Experts say investors should act prudently without getting too excited by the recovery in the last few sessions.
If the war continues, the market will remain under pressure and may fall from current levels. In times of volatility, investors need to be more cautious.
Experts say that at such a time, investors should distance themselves from small and mid-cap companies, as they may be more vulnerable in the scenario of rising costs and weak demand in the event of a long-term war.
At such times investors should be protected from short-term investments. They should invest given the duration of at least one-hundred-year. At the same time, investors should invest through SIPs to avoid excessive risk.
When there is a war, no one can tell what the bottom of the market will be. New investors should resort to SIPs in such a situation.
