For the last few days, the Indian stock market has been in a downtrend. Both the major indices i.e. Sensex and Nifty have fallen by about 10 percent from their all-time high level. There are many reasons for this correction. Foreign Portfolio Investors (FIIs) are continuously selling. Most of the companies are getting good quarterly results. Global instability has also increased.
The recent decline in the stock market has also shaken the confidence of investors. But, experts believe that there is nothing to fear for long term investors. One should just wait for the market to stabilize before making any new bet. Let us know what is the reason for the decline in the Indian stock market and what investors should do at the moment.
Is the decline in the stock market spoiling the Indian economy?
The Indian economy saw a strong boom after the recession of the Corona period. If we look at the last few quarters, GDP growth has been between 7 to 8 percent. In such a situation, experts believe that it is common to slow down after such a boom. The Indian economy is coming out of a cyclical slowdown. There is no such thing as a structural slowdown in this. Consumption will gradually come back on track and the economy will start growing again.
When will investors get a chance to invest?
Experts believe that cyclical slowdowns come every 4-5 years. During this time the economy slows down a bit and the stock market also falls. This gives long term investors a good opportunity to invest. As soon as the financial results of companies and consumption improve, FII money will start coming into the market again, then the market will start flying again. In such a situation, investors should look for an opportunity for the next five years. They should not be afraid of the current decline.
What should investors do now?
Investors should avoid being too negative right now. However, they should not be too excited either. Investors can focus on select companies that have given very strong quarterly results despite the economic slowdown. Experts believe that the possibility of a decline in the market cannot be ruled out in the near term, but the market is more likely to go up than the risk of a decline.