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  • Category: Miscellaneous

    Why stock exchange tumbles on sensing rumors about wars?

    Nowadays the media is prominently covering news about drastic fall in the Pakistan's stock market. It is being attributed to the perceived escalation in the Indo-Pak animosity. Such fluctuations occur in Indian stock markets also from time to time when we see Sensex and Nifty falling.

    The basic question is as to why stock exchange tumbles on sensing rumors about wars? Is war that bad that it affects the whole economic structure of a nation?

    In case so then why we talk about waging a war?
  • #579644
    Any country's economic situation will be reflected in its stock markets and we know that a major war can take us to the economic level, which existed 10-15 years back. So, obviously stocks will correct accordingly if there is war. Stock markets rises/falls on rumors and falls/rises on actual news. Since a probable war is a negative rumor, stock markets fall beforehand.
    Since most of the economies are interlinked and lot of foreign investments exist in our stock markets, a war rumor in other countries also affect our stock markets.

  • #579646
    The share market is highly sensitive. It always reacts on every national and international news having remotest impact on the economy. Not only that, share market also reacts to rumours. So, it is quite natural that Indian share market would react on the rumour of war, because war always has an adverse effect of economy of any country.
    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #579692
    The share market is highly volatile to the behavior of things in politics, nature and even political turmoil. In this case a sponsored terrorism which is causing ripples in Asia and possibly hinting a war like situation. India is in drivers seat to trigger the war because we gave enough time to Pakistan to mend ways. When the other player wont listen the last resort would be igniting war. Remember even the word spells doom to Pakistan economy and if really a war begins just imagine the catastrophe it can cause. So markets are also watching the foolish behavior of Pakistan.
    K Mohan
    I consider myself as the learner everyday

  • #579744
    The last part of my question has not yet been answered by any of the fellow ISCians which is - 'In case so then why we talk about waging a war'?
    Let us encourage each other in sharing knowledge.

  • #579779
    Those who manipulate stock exchange prices are just waiting for some alibi to manipulate prices for their advantage. Anything can be a reason for those syndicates and cartels who manipulate stock prices. Innocent, gullible small investors are always victims.
    Let us keep faith on ourselves and work sincerely, not leave everything to fate.

  • #579803
    It is true that stock markets tend to tumble on positive and negative news of international and national origin. The negative rumours like war can make the markets crash as waging a war needs huge investment on artillery and ammunition. A war situation typically demands huge amount of money for military operations and for ministry of finance, sponsoring this warfare will be top priority than any other situation that arises in the country such as poverty, hike in market rates of common goods etc.

    Waging a war could also impact the country rating in Standard and Poor's list that may affect direct and indirect foreign investments FDI's. Due to these for facts, stock markets tumble upon war news.

    India knows it's current Financial situation well and could anticipate the loss of waging a war. That's the reason our country is using clever thinking capability and solving the issue with the help of its friendly nations to make Pakistan alone.

    Venkat Satish Mamidisetti,
    Electrical Engineer.

  • #579816
    For the question"The basic question is as to why stock exchange tumbles on sensing rumors about wars? Is war that bad that it affects the whole economic structure of a nation?" Answer -When there is a possibility of war or real war has set on, all the items and commodities become very expensive even 300-400% inflation rises.There is a shortage of commodities even not available at any price. If there is a bomb or missile attack on the stock market building, all the data will loss and all the money invested by people will go into vein.

    In case so then why we talk about waging a war?-Answer- It is not in our hand or one country's hand to avoid the war.Sometimes it becomes inevitable to waging the war.

    'Education is a lifelong process, keep on learning new things'

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