What is "Bull" and "Bear" in Share Market ?

Where Did "Bulls" and "Bears" Come From?

The terms "bear" and "bull" are thought to derive from the way in which each animal attacks its opponents. That is, a bull will thrust its horns up into the air, while a bear will swipe down. These actions were then related metaphorically to the movement of a market. If the trend was up, it was considered a bull market. If the trend was down, it was a bear market.

1. What is Bull Market ?

A bull market is a market that is on the rise and where the economy is sound.

1. What is Bear Market ?

A bear market exists in an economy that is receding and where most stocks are declining in value. 

Because the financial markets are greatly influenced by investors' attitudes. These terms also denote how investors feel about the market and the ensuing economic trends

Some Characteristics of Bull and Bear Markets:

Although a bull market or a bear market condition is marked by the direction of stock prices, there are some accompanying characteristics that investors should be aware of.

1)Supply and Demand for Securities

In a bull market, there is strong demand and weak supply for securities. In other words, many investors wish to buy securities but few are willing to sell them. As a result, share prices will rise as investors compete to obtain available equity. In a bear market, the opposite is true: more people are looking to sell than buy. The demand is significantly lower than supply and, as a result, share prices drop.

2) Investor Psychology

Because the market's behavior is impacted and determined by how individuals perceive and react to its behavior, investor psychology and sentiment affect whether the market will rise or fall. Stock market performance and investor psychology are mutually dependent. In a bull market, investors willingly participate in the hope of obtaining a profit.

During a bear market, market sentiment is negative; investors begin to move their money out of equities and into fixed-income securities as they wait for a positive move in the stock market. In sum, the decline in stock market prices shakes investor confidence. This causes investors to keep their money out of the market, which, in turn, causes a general price decline as outflow increases.

3)Change in Economic Activity

 Because the businesses whose stocks are trading on the exchanges      are participants in the greater economy, the stock market and the economy are strongly linked.

A bear market is associated with a weak economy. Most businesses are unable to record huge profits because consumers are not spending nearly enough. This decline in profits directly affects the way the market values stocks.

In a bull market, the reverse occurs. People have more money to spend and are willing to spend it. This drives and strengthens the economy.

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