Although Indian benchmark indices, Sensex and Nifty, have managed to recover from earlier losses and are now trading in the positive, market expert Shankar Sharma has issued a word of caution about the ongoing market scenario. According to Sharma, the current market situation should not be mistaken for a mere correction. Instead, he firmly believes that we are currently in a bear market.

On Monday, Sharma emphasized the importance of distinguishing between a correction and a bear market. He advised, “Never mistake a correction for a bear market… Never mistake a bear market for a correction.” This statement highlights his belief that the current market downturn is more than just a temporary pullback.

Elaborating on what defines a bear market, Sharma clarified that a decline of over 20% from the market’s recent highs is a clear indicator of a bear market. As per his assessment, the current market condition fits the definition of a bear market, as the indices have experienced a significant drop.

Market corrections are typically seen as short-term declines in stock prices, often triggered by various factors, such as shifts in investor sentiment or macroeconomic conditions. They are usually followed by a recovery. In contrast, a bear market is characterized by a prolonged downturn, typically lasting for an extended period, and marked by a decline of at least 20% or more from recent highs.

Shankar Sharma’s warning reflects a cautious outlook on the market, urging investors to be aware of the broader trend and not get misled by short-term recoveries. While markets may show occasional rallies, the underlying sentiment remains negative, according to his assessment.