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Indian Stock Market: Small and retail investors have become worried due to the huge volatility in the Indian stock market. He believes that most investors are enjoying the bullish prospects in the market due to the expected results of the Lok Sabha elections on June 4. But looking at the past trend of the stock market, the trend of volatility is likely to continue during this year 2024. Volatility will continue in the current calendar year due to four main factors. Therefore, common investors are advised to book profits from the increased capital.
1. Direct and indirect impact of Lok Sabha elections
Due to the Lok Sabha elections, the volatility index is also trading between 22.75 and 24.52. Which is indicating big fluctuations in the stock market. In the last two months, the Sensex has traded in the high-low range of 71816-76009. Which shows a volatility of 4193 points.
2. Implications of the US presidential election
At the end of the current calendar year, the presidential election in the United States is scheduled to take place in November. Nifty-50 witnesses a huge contraction during these elections which take place every four years. Important events taking place in the US have an impact on the Indian stock market.
3. The effect of leap year
Out-of-balance volatility is seen in the stock market every four years. For the last nearly two decades, leap years have seen volatility of 25 to 35 percent in the stock market. The volatility rate remained high due to the recession of 2008 and the Covid pandemic in 2020. It can be understood from the graph that there is huge volatility in the market at the beginning of the Lok Sabha elections in India and the last phase of the US presidential election.
Leap Year Effect:
The stock market fluctuates every four years
| Year | High | Take | to reduce | Reduce % |
| 1996 | 1,203.00 | 775.43 | 427.57 | 35.54 |
| 2000 | 1,818.15 | 1,108.20 | 709.95 | 39.05 |
| 2004 | 2,014.68 | 1,292.20 | 722.48 | 35.86 |
| 2008 | 6,357.10 | 2,252.75 | 4,104.35 | 64.56 |
| 2012 | 6,338.50 | 4,588.05 | 1,750.45 | 27.62 |
| 2016 | 9,120.00 | 6,825.80 | 2,294.20 | 25.16 |
| 2020 | 12,430.50 | 7511.1 | 4,919.40 | 39.58 |
| 2024 | 22,124.15 | , | , | , |
Numerological Impact of 2024
The numerological value (lucky number) of 2024 is 2 + 0 + 2 + 4 = 8. Number 8 represents the planet Saturn. Which predicts volatility in the financial market.
IndiaVIX continues to rise
VIX is known as the fear index. A rise indicates bearishness and a fall indicates bullishness for the market. Currently, the India VIX index is near a record high (26.20). This indicates a bearish rise with heavy volatility.
Who is adversely affected in this situation?
A volatile market is not a good situation for ordinary investors or traders as they tend to buy and hold. Market volatility is dangerous for small investors.
Who is this situation beneficial for?
Particularly beneficial for technical traders and especially option traders. Option traders take advantage of this situation with the help of technical analysis.
So what could be the investment strategy in such a situation?
In such a situation, with the help of an experienced and expert, you can focus on booking immediate profits on the investment cost. While long-term investors can maintain the investment.
Disclaimer:
This article is for educational purposes only. We do not give any investment advice. It is necessary to consult a financial advisor or expert for investing in the stock market. We do not fully support the article published on any platform of 'Gujarat Samachar'. All these articles are the personal opinion and analysis of that financial advisor or expert. If a reader suffers a loss after investing in the stock market, then 'Gujarat Samachar' organization is not obliged to compensate them in any way.
