In this post we will see about bull market and also characteristics and reasons behind it . We will also see about difference between bull and bear market.
Introduction to Bull Market
You might be thinking why the market is called ‘Bullish’ ? Because when the bull is in anger he swings his head from bottom to up and smashes everything . This behavior is similar to stocks in uptrend it converts any selling into buying .
Bull market is a period in a market in which asset prices continues to rise. Bull market term is not only related to stocks or gold but it is also related to real estate , currency and commodities. It is a market in which stock prices rise by 20 percent or more .During this time stock prices rise everyday and the selling in market is seen as buying opportunity.
Characteristics of Bull market
In this market peoples investments grow , their confidence goes high , liquidity increases. This happens only when economy is growing , inflation is low , unemployment is low . Also factors such as GDP and stocks earning is growing . During this time stock prices increases nearly everyday. Market volatility is less and cash inflows are high in market . Due to this stock demand increases and prices go higher .
Factors of Bull Market
- Mostly bear market occurs after a long bear or volatile market , Where stock prices are relatively low and investor has cash in hand .
- Economic factors such as growing economy , higher tax collections and lower employment rates .
- When interest rates of banks are lower , people prefer stocks instead of FD so cash inflows increase in market.
- When the business are doing good , increasing profits and margins .
Recent Bull markets in Nifty
The most Bull run of Nifty was after covid . When the Nifty was crashed to level 8000 in march 2020 , markets bounced back to its highs in December giving nearly 50% returns to investors . After that bull run continued for next 1 year and by end of 2021 it reached its highest level of 18600. Giving huge 150 % returns to investors from march lows in one and half years .