Bear Market
11.04.2025
Bear Market
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For Prelims: About Bear Market |
Why in the news?
S&P 500 — a stock market index that tracks the performance of 500 of the largest publicly traded companies in the US — briefly entered bear market territory for the first time since 2022.
About Bear Market:
- A bear market is a financial market experiencing prolonged price declines, generally of 20% or more.
- A bear market usually occurs along with widespread investor pessimism, large-scale liquidation of securities and other assets, and a weakening economy.
- A bear is an investor who expects prices to decline and, on this assumption, sells a borrowed security or commodity in the hope of buying it back later at a lower price, a speculative transaction called selling short.
- Bear markets are often associated with declines in an overall market or index, but individual securities or commodities can also be considered to be in a bear market if they experience a decline of 20% or more over a sustained period of time, typically two months or more.
- Bear markets also may accompany general economic downturns such as a recession.
- They are seen as the opposite of upward-trending bull markets.
Source: Indian Express
Which of the following is a common feature of a bear market?
A.Rising investor confidence
B.Bullish trends across sectors
C.Widespread investor pessimism and liquidation of assets
D.Stable economic growth
Answer C