Nifty 18210.95 (-0.31%)
Sensex 61143.33 (-0.34%)
Nifty Bank 40874.35 (-0.88%)
Nifty IT 35503.9 (0.97%)
Nifty Financial Services 19504.75 (-0.74%)
Adani Ports 745.85 (-0.54%)
Asian Paints 3094.65 (4.20%)
Axis Bank 787.50 (-6.46%)
B P C L 427.70 (-0.78%)
Bajaj Auto 3776.50 (-0.40%)
Bajaj Finance 7482.15 (-4.75%)
Bajaj Finserv 18012.00 (-1.86%)
Bharti Airtel 702.35 (0.88%)
Britannia Inds. 3697.85 (0.14%)
Cipla 922.50 (1.65%)
Coal India 173.60 (-0.83%)
Divis Lab. 5149.35 (2.60%)
Dr Reddys Labs 4662.70 (-0.08%)
Eicher Motors 2583.90 (-0.25%)
Grasim Inds 1728.40 (-0.63%)
H D F C 2915.00 (0.12%)
HCL Technologies 1177.15 (0.89%)
HDFC Bank 1642.80 (-0.60%)
HDFC Life Insur. 693.85 (0.55%)
Hero Motocorp 2690.15 (-0.38%)
Hind. Unilever 2396.60 (-1.65%)
Hindalco Inds. 479.85 (-1.28%)
I O C L 130.80 (-0.53%)
ICICI Bank 835.00 (0.68%)
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Infosys 1728.95 (1.48%)
ITC 238.45 (0.74%)
JSW Steel 684.90 (-1.36%)
Kotak Mah. Bank 2188.25 (-1.03%)
Larsen & Toubro 1784.55 (-0.65%)
M & M 886.80 (-0.87%)
Maruti Suzuki 7356.25 (0.81%)
Nestle India 19004.60 (-1.11%)
NTPC 141.30 (-1.33%)
O N G C 157.90 (-3.19%)
Power Grid Corpn 190.25 (-0.08%)
Reliance Industr 2627.40 (-1.26%)
SBI Life Insuran 1186.00 (1.19%)
Shree Cement 28107.75 (1.19%)
St Bk of India 519.15 (1.29%)
Sun Pharma.Inds. 825.10 (1.43%)
Tata Consumer 818.75 (1.22%)
Tata Motors 497.90 (-2.11%)
Tata Steel 1326.15 (-1.30%)
TCS 3489.75 (0.21%)
Tech Mahindra 1567.85 (0.29%)
Titan Company 2460.10 (0.22%)
UltraTech Cem. 7354.20 (1.17%)
UPL 741.50 (3.96%)
Wipro 671.10 (0.44%)

Bulls and bears: What do they mean?

Bulls and bears: What do they mean?

You must have often heard investors talking about a Bull or a Bear market and how they lost money or earned a profit during these times. If you are a beginner investor and looking to invest in the share market, the understanding of a Bull and a Bear market is important for success.

Bull Market

A bull market is when the buyers are optimistic about the rise in the prices of the shares. It is the time when the share prices are rising because the economy is doing well, the GDP is rising, and the unemployment level is low. It gives the investors’ confidence that the share prices will rise and they tend to buy more shares in the market. The investors who are optimistic and buy shares at this time are called “Bulls.”

Bear market

A bear market is when the buyers are pessimistic about the rise in the prices of the shares and the sellers outnumber the buyers in the market. A bear market is due to the economy not doing very well; the GDP levels are falling, unemployment is high, and there is a fair chance that recession is approaching. When the investors are pessimistic, they tend to sell their shares rather than buy new ones and thus, are called “Bears.”

What drives the Bull and Bear markets?

The Indian stock market is affected by many economic and social factors. Rising economy, high employment levels, increased GDP, stable economic and social factors help build the confidence of the investors to invest money in the share market. This is the main reason that gives rise to a Bull market.

Apart from these, new technologies and companies that encourage the investors to invest money in stocks can also create a bull market. For example, during the dot-com craze in the 1990s, many companies encouraged the investors to put money in the market, which in turn created a bull market.

On the other hand, deteriorating economy, decreasing employment levels, falling GDP and unstable social and economic factors reduces the confidence of the investors and force them to sell their shares to cut their losses. This lead to fall in prices of the shares and a bear market is established.

As the economy falls, the companies start to downsize. Increased level of unemployment makes investors far less willing to invest money in the market. This is a time that they need money, so they sell their shares and create a bear market.

How to predict a Bull and Bear market?

One of the easiest ways to predict Bull or a Bear market is to understand that ‘History repeats itself’ and ‘what goes up must come down.' That is, if in the current market, the share prices are rising, you know that they will fall in the future and a bear market will be established. And if the prices are falling in the current market, you can be confident that eventually, the share prices will rise again and a bull market will be established.

While you can’t precisely predict when a Bull or a Bear market will be established, certain things can affect a current market and drive it to change its course:

  • A bullish market will be established if a country wages war, as it will produce more jobs and the investors will feel confident if they think they would win.
  • A sudden international crisis will always create a bearish market as the economies are affected negatively.
  • Negative news about a company having huge market capitalization affects the market negatively and creates a bearish market. Positive news, on the contrary, creates a bullish market.

To sum up

A bullish market is a time when the demand is higher than the supply of shares and results in the rising of the share prices. A bearish market is a time when the supply is higher than the demand for the shares and results in the fall of the prices of the shares.

It is wise that an investor buys more shares during a bearish market as the shares are available for cheap and sell his/her shares during a bullish market as more people are looking to buy during this time and you can sell your shares at a higher price and book a profit.

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How To Use SIP Based Investment To Buy Home?

How To Use SIP Based Investment To Buy Home?
by Priyanka Sharma 14/08/2017

Buying your own home might be a long time desire for you. You have everything planned right from the location, the type of property, to your interiors and furniture. You even make a proper budget regarding your spending so as to be eligible for a better home loan. But, is a home loan the only option for buying an expensive property?

Systematic Investment Plan is a great option when it comes to contributing dedicatedly for your future. Here, you invest a fixed amount for a fixed period of time and it helps you meet your goals in an organized manner; just like Equated Monthly Installment (EMI), you pay for your home loan. Yes, you have read it right. Do you want to know the reason behind it? Read this:

Why is SIP based investment a valid option to buy a home?

1) Timing the market is not necessary
SIP is a systematic way of investing in the market and therefore you do not need to time the market for it. Once you make a goal of owning a house and you have a plan to reach that goal, don’t wait for the right time to invest. SIP’s ensure that the time you invest is the right time for you. 

2) Investment convenience
SIP allows the investor to invest in mutual fund without any hassle or intervention required from their part. The investor only needs to give standing instruction to their bank to transfer a stipulated amount on a fixed day every month towards SIP. This reduces the trouble of the investor to remember and deposit it manually. It also ensures that you do not delay in payments.

3) Rupee cost averaging reduces risk
As mentioned earlier, the time you invest is going to be the right time for you. You can tackle the market fluctuation and gain maximum profit on investments with a long term investing approach of Rupee Cost Averaging. It ensures that when the rates are low, you get more NAV (Net Asset Value) and when the price is high, you get a lesser number of shares. Not only is this automated, it also saves you from the risk of buying more when prices are high. Investing a monthly fixed income maintains the average cost of investment at a lower level thus, giving you profit in a long term.

4) Power of compounding increases chances of meeting long-term plans
‘The earlier, the better’ is the mantra to be successful in investments. Compounding is a key factor for investments and returns. The power of compounding comes into play when your returns are reinvested and you earn interest on your interest earned too. The profit is much higher when you do this for a longer period of time. 

5) Offers liquidity and is flexible in terms of investment
SIP offers you tremendous amount of flexibility when you invest in it. You can choose the amount which can be as low as Rs. 500 to the tenure of your investment. You can also choose the frequency of your investment as being daily, weekly, every fortnight or every month depending on your convenience. You can stop and close your SIP at any time as well and hence, it provides you with a fair amount of liquidity too. 

In a nutshell
SIP’s can help you accumulate money for the down payment or for buying your home with full payment if you dedicatedly plan and invest in it for a longer term. If you invest the amount in an SIP which you would otherwise invest in your EMI, the profit through the effect of compounding is much more, than in the long run. 

untitled

Hence, from a financial point of view, it is advisable to invest in a long-term SIP of around 15 years rather than spending the same amount on EMIs and not getting anything out of it.

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5 Stocks for next week (21st-25th Aug)

5 Stocks for next week (21st-25th Aug)
by Gautam Upadhyaya 18/08/2017
Untitled Document

    Petronet Lng  - Buy

Stock

Petronet Lng

Recommendation

Petronet  Lng has managed to give a close above its resistance levels on the weekly chart. The stock is also in a higher top higher bottom chart structure.

Buy/Sell

Range

Target

Stop Loss

Buy (Cash)

226-229

252

213

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

532522 

PETRONET

34,380

236-158

200

Eicher Motors- Buy


Stock

Eicher Motors

Recommendation

Eicher Motors is seeing a strong uptrend, the stock has taken support along its weekly 10-EMA. The weekly MACD Histogram is also indicating good strength.

Buy/Sell

Range

Target

Stop Loss

Buy(Cash)

31400-31550

33600

29760

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

505200

EICHERMOT

85,817

32464/19570

26205

HUL - Buy


Stock

HUL

Recommendation

HUL has given a closing at its all time high; the stock has also formed a bullish engulfing candlestick pattern. We expect this uptrend to continue and recommend a buy in the stock.

Buy/Sell

Range

Target

Stop Loss

Buy (Cash)

1195-1204

1270

1145

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

500696

HINDUNILVR

259,930

1209/783

998

Piramal Enterprises – Sell


Stock

Piramal Enterprises

Recommendation

Piramal has shown weakens in the last few trading sessions giving a close below its short term EMA. In addition, the stock has shown weakness on the weekly MACD Histogram.

Buy/Sell

Range

Target

Stop Loss

Sell Aug Futures

2704-2714

2500

2852

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

 500302 

PEL

46,384

3008/1366

2333

Fortis Healthcare - Sell


Stock

Fortis  Healthcare

Recommendation

Fortis Healthcare has given a breakdown below its support levels on the daily chart. Furthermore, the stock has shown weakness on weekly MACD Histogram.

Buy/Sell

Range

Target

Stop Loss

Sell(Aug Futures)

145.5-147.5

134

154.6

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

532843

FORTIS

7,521

230/142

178

Disclaimer: https://www.5paisa.com/research/disclaimer

Next Article

5 High-Dividend yielding stocks that you should know

5 High-Dividend yielding stocks that you should know
by Nikita Bhoota 22/08/2017

Generally, investors in India avoid taking risk while investing. They look for investment instruments which offer consistent returns and are less volatile. However, one may prefer investing in high dividend yielding stocks which give stable income vs. high value/expensive stocks that involve more risk. Before discussing high-dividend yielding stocks, let us understand what exactly is the dividend yield?

Dividend yield is the annual return which the stock pays in the form of dividends. Dividend yield is calculated by dividing the dividend per share by current market price. High dividend yield could be a result of either fall in the stock price or payment of higher dividend. Therefore, one should also consider the fundamentals of the company while selecting high dividend yielding stocks.

Below-mentioned are some of the high-dividend yielding stocks.

Stock

Dividend Yield (%) 2017

3 Years Average Dividend Yield (%)

Coal India Ltd.

8.1

9.2

Hindustan Petroleum Corporation Ltd.

6.1

6.0

Oil India Ltd.

5.4

6.3

Oil & Natural Gas Corporation Ltd.

4.8

5.4

Indiabulls Housing Finance Ltd.

3.4

3.3

Source: Ace Equity

Coal India (CIL)

CIL is the largest coal producer in the world and controls 80% of the Indian coal market. Its product portfolio largely consists of thermal coal - 97% while the rest is cooking coal. The company is debt free and has net cash of ~ Rs 29,000 cr (FY17) in its books. The company has a mature business and may not require major capex going forward, which will help it maintain healthy cash flows. The average dividend yield for the past 3 years is 9.2%, while it was 8.1% in FY17.

Hindustan Petroleum Corporation Ltd (HPCL)

HPCL is a leading oil and gas refining and marketing company in India with a market share of 21.44% as on FY17. It operates two major refineries producing petroleum fuels with a capacity of 7.5 MMTPA (Mumbai) and 8.3 MMTPA (Visakhapatnam). The company has consistently maintained its average dividend payout ratio in the range of 30% in the past 5 years and is expected to improve further on account of government push on PSU’s to double their dividend payout ratio. Government holds 51% stake in HPCL. The company’s average dividend yield stood at 6% for the past 3 years.

Oil India Ltd

Oil India is the second largest oil and gas exploration and production companies in India. The company has healthy debt to equity ratio of 0.5x (FY17) and average dividend payout ratio of 47% in the past 5 years. However, the company has shown poor financial performance historically. Therefore, in order to maintain its ROE and reward the shareholders, we expect the company to maintain its dividend yield in the future. The average dividend yield for the past 3 years stood at 6.3%.

Indiabulls Housing Finance Ltd (IHFL)

IHFL has transformed from a diversified lender to a focused mortgage player. Its outstanding loans stood at ~Rs 81,422 cr as of FY17. Loan book mix was ~79% mortgage loans and ~21% corporate financing. GNPA & NNPA presently stands healthy at ~0.85% and ~0.36% respectively. IHFL’s PAT has tripled to Rs 2,900 cr in FY17 in the past five years. We believe that strong profitability growth and adequate capital will help the company to maintain its average dividend payout ratio of ~65% in the past 3 years. The average dividend yield for the past 3 years was 3.3%.

Oil & Natural Gas Corporation Ltd (ONGC)

ONGC is the largest oil and gas exploration and production company in India. It accounts for ~70% of India’s oil and gas production. ONGC has maintained dividend payout ratio of more than ~40% in the past 5 years and has reached to 51% in the FY17. We expect the company to maintain a higher dividend payout ratio given its strong growth prospects with the commencement of new fields and efforts for redevelopment in existing fields. The average dividend yield for the past 3 years was 5.4%.

Next Article

Robo-Advisors V/s Direct - Advisors - Which is the better one?

Robo-Advisors V/s Direct - Advisors - Which is the better one?
by Nutan Gupta 23/08/2017

This is the age of machines. Machines have been making life easier for humans in all walks of life. Even in the finance sector the entry of Robo-advisors spells the beginning of a new era. However, the term Robo-advisors doesn’t paint a clear picture. A robo-advisor simply runs algorithms to determine the perfect investment for you.

However, finance and investment are very personalized fields with a lot of decisions made on the basis of trust and familiarity. This kind of a bond exists between investors and their Direct Investment advisors.

The tussle between Robo-advisors and Direct Investment advisors will determine the methods of investment in the future. Hence, we decided to pit these two together and compare their pros and cons to get a better understanding of the correct option:

Factor 1# Price
Robo-advisors
have a fairly straightforward and transparent pricing structures which is clearly explained on their websites. It might not have a minimum amount you must invest to avail their services. Robo-advisers charge 0.25% as average fee along with around 0.15% additional charge.

Direct Investment advisors, on the other hand, sometimes require a minimum portfolio value to take up your account. They can be unclear about how exactly they're charging you. Direct Investment advisors traditionally charge a comparatively higher average fee of 1.31%.  

Factor 2# Convenience
Robo-advisors
are a viable choice for people who simply aren't going to take the time to learn about managing their money. It's a good fit if you have a personality where you just don't want to deal with it. You set it and forget it.

Direct Investment advisors can be contacted with modes of modern technology like email, Skype on your cell phone itself. It's not like you have to trek to your investment advisor's office anymore. It's more that you can check in with them at regular intervals.

Factor 3# Accountability
Robo-advisors
take only the information you give it and formulates a plan based on numbers. In this process your financial future is rarely focused on just the numbers. The way a robo-advisor does it, setting and forgetting your investments may not be the most effective way to achieve your goals.

Direct Investment advisor's strength lies in their ability to translate your dreams of an oceanfront beach house into a dollar figure, and to create a plan to get there.

Factor 4# Effectiveness
Robo-advisors
tend to be heavily invested in conservative products like Exchange Traded Fund (ETF) because they suit a wider range of people. ETFs are not known to be risky but they aren't known for their staggering returns either. This means that is more of a less risk as well as less return approach.

Direct Investment advisors are in touch with you and you can give them the perspective and context to adjust investments to your needs. However, they certainly aren't guaranteed to outperform their robotic friends. Go to a financial advisor if you are investing a larger amount don’t use a robo-advisor.

Conclusion
To sum up this debate there are positives in both sides. The clients of the Direct Investment advisors and Robo-advisors are completely different and have different needs.

Next Article

5 Stocks for next week (28th Aug-1st Sep)

5 Stocks for next week (28th Aug-1st Sep)
by Gautam Upadhyaya 24/08/2017
Untitled Document

Aurobindo Pharma  - Buy

Stock

Aurobindo Pharma Ltd

Recommendation

The stock has given a breakout from a symmetrical triangle formation on the daily chart; the breakout has been backed by a surge in volumes. Positive crossover on the MACD further accentuates our bullish view on the stock.

Buy/Sell

Range

Target

Stop Loss

Buy (Cash)

728-732

777

695

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

524804

AUROPHARMA

42,921

895/504

687

Bajaj Finserv- Buy

Stock

 Bajaj Finserv

Recommendation

The stock has given a breakout from its sideways consolidation of the past three weeks; the stock is currently trading at its all time high and is in a higher top higher bottom chart structure. We expect the uptrend to continue.

Buy/Sell

Range

Target

Stop Loss

Buy(Cash)

5490-5510

5900

5210

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

532978 

BAJAJFINSV 

                87,582

                5523-2515

4019

Bharat Electronics- Buy

Stock

Bharat Electronics

Recommendation

The stock has managed to give a flag pattern breakout on the daily chart. Volumes have also supported the price outburst, which affirms our positive stance on the stock.

Buy/Sell

Range

Target

Stop Loss

Buy (Cash)

186-188

198

180

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

500049

BEL

41,947

189/118

161

Gruh Finance- Buy

Stock

Gruh Finance

Recommendation

The stock has form a bullish engulfing pattern on the daily chart. Also, it has managed to give a breakout on the weekly chart. A closing at its all time high further accentuates our positive view on the stock.

Buy/Sell

Range

Target

Stop Loss

Sell Aug Futures

508-512

546

486

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

511288

GRUH

18,681

515/270

403

Bosch Ltd – Sell

Stock

Bosch  Ltd

Recommendation

The stock has shown weakness over the past few trading session. The stock has also given a breakdown from the descending triangle formation on the daily chart and is currently trading below its 200-EMA.                  

Buy/Sell

Range

Target

Stop Loss

Sell(Aug Futures)

21740-21770

20880

22490

BSE Code

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

500530

BOSCHLTD

66,145

25649/18005

         22904

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