New Delhi. The Indian stock market has been very volatile in the year 2022. The amount of up-down in the stock market in this quarter has probably not happened in any quarter before. If the stock market goes up one day, then the next day it falls upside down. In January 2022, Nifty reached 18,300 and in March it came down to 15,800.
Brokerage firm Motilal Oswal has blamed the Lollapalooza effect for this volatility in the stock market. According to a report in Live Mint, Ashish Shankar, MD & CEO, Motilal Oswal, says that many factors are simultaneously affecting the market. That’s why the stock market is getting hitched.
What is the Lollapalooza Effect
The term Lollapalooza Effect was coined by Charlie Munger, the vice-chairman of Berkshire Hathaway. This means that sometimes many things come together to determine the behavior of a person. This can result in both positive and negative results. If the Indian stock market is assessed in the context of this term, then it is known that many factors are affecting the stock market simultaneously.
In three-four months some big events have happened, which are directly affecting the stock market. Among these are the Russo-Ukraine war and the rise in interest rates around the world. Due to the Ukraine crisis, geopolitical tensions have increased and the supply of commodities has been greatly affected. Due to this, inflation is increasing all over the world. Similarly, there has been a direct negative effect on the economy and industry due to the indications of the central banks of various countries raising interest rates or raising them in the future.
After the outbreak of Corona virus, governments around the world cut interest rates to support the economy. Now when the economy is recovering, interest rates are being increased. Due to this, the stock markets around the world are fluctuating.
Fundamentals of Indian market strong
Market experts say that the fundamentals of the Indian stock market are strong. This shows that the stock market has not fallen much in spite of huge ups and downs. The Nifty 50 has fallen just 5 per cent from its recent high. This means that there is nothing to worry about for the market in the medium to long term.
Consolidation may continue for short term
Market experts say that consolidation may remain in the market for some more time. Therefore, in the current circumstances, investors should avoid investing too enthusiastically. At this time, you can invest little in the stocks of companies with strong fundamentals. Making profits in the short term seems a bit difficult right now. The conditions are currently favorable for investing for the long term. Investors can buy a little on every fall in the stock market.