Why are Indian Stock markets so volatile?

Who says only the Indian Stock markets are volatile? The Stock markets are barometers of the economies of the respective countries and their volatility would depend on the various  economic/political/social/etc activities that take place.

If you're saying the Indian markets are volatile, I'm wondering what you'd have said if you were a citizen of Argentina/Dubai.


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Volatility is a part of market and why market becomes volatile is for the reason that suppose market is rising but still smart people taking opposite directions like writing call options or buying put options , recent volatility is for several reasons like market facing reality about earnings , all stupid analyst which are saying about 20% earning growth for fy15 are finding place to hide , now they are saying about that growth coming in fy17 , anyway leave that fy 17 will also come and then they say in fy 20 , yellen qe coming to an end that why global bond yields are bouting , the main reason for run up in indian market is because of liquidity not because of fundamantels , liquidity coming to end , probably this year of yellen QE and in FY 16 of mario draghi !

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Could you explain economic/political/social, I am not a citizen of Argentina/Dubai, so asked about India.

Economic activities: Inflation And Deflation, Interest rates etc
Political: The Government of India, scams. Following the Indira Gandhi assassination, the markets sank as morale was low and Indians were nervous to invest. The stock market is undoubtedly affected by the national election cycle as well.

That could have been a part of the Answer, Instead of you wondering about I being a citizen on Argentina/Dubai. :slight_smile:

The main causes of volatility are following -

  1. The economy is volatile and changes in economic rate are also affect the market.

  2. A contraction in the economy leads to lower revenues for businesses, and with fixed overheads this, in turn, amplifies the reduction in corporate earnings.

  3. Stock markets are emotional and over-react relative to the likely change in these underlying business fundamentals.

And if the trader is not so much able to tackle the risk then he might be facing huge loss in the market. A trader can refer trading tips like stock tips, commodity or forex tips to from financial experts. It will help them to take the right decision at right time.