observe the stock market fluctuating every day. You would have read stock news
from the previous day, which states that HPCL climbed 0.7 percent, Yes Bank
dropped 0.35 percent, and Reliance Industries was flat with a positive 0.01
percent. Furthermore, these variations can be astonishingly huge in a single
trading day, such as when Titan surged +18 percent in a single trading session
these fluctuations? Why are stock prices so volatile? What factors influence
the reasons for stock price volatility is critical for better stock market
witness two types of people in the market.
People who demand
People who supply
"supply" refers to the total number of people eager to sell their
stock at any given price.
"demand" refers to the total number of people who are willing to buy
something at any price
of stocks in the share market are primarily determined by demand and supply of
the stocks prevailing in the market.
equilibrium is defined as the point when supply and demand meet, i.e., all
possible buyers and sellers trade until one agrees on a price.
price rises when the number of people ready to buy the stock (demand) exceeds
the number of people who want to sell the stock (supply).
number of people wanting to sell a stock (supply) exceeds the number of people
wanting to buy a stock (demand), the stock price falls.
is simple to argue that price changes are caused by demand and supply,
understanding what causes demand and supply is a tricky topic to understand.
some stocks and dislike others for a number of reasons, which we''ll go through
indicators which affect the Demand and Supply of a stock are as follows.
1 A company
revealing important news.
company reveals important news, when the news is positive demand for that
company rises. When the news is negative, demand falls and people attempt to
sell their stocks. People can sometimes be unsure if the news is neutral.
and Ideas of different investors
have never seen two investors who agree on everything when it comes to a stock.
Every investor has his or her own strategies and ideas. Some investors prefer
the stock, while others may not (due to various reasons). The demand for a
stock is also influenced by the investor’s differing opinions and strategies.
The stock market is driven by emotions, and
greed and fear are the driving forces. When people are greedy, the demand for
stocks rises. When investors are fearful, they want to sell all of
their stocks and get out of it, causing a supply spike. The stock price
fluctuates as a result of investors greed and fear. However, no one is
greedy or afraid at the same time.
4 Other significant
There are a
variety of other factors that influence share market fluctuations. Changes in
government policies (new charges, increases in excise duty, sales tax, annual
budget), Natural disasters, fluctuations in bank interest rates, participation
of domestic and international institutional investors, fluctuations in
international indexes such as the Dow Jones in the United States, the DAX in
Germany, the Nikkei in Japan, etc., people''s speculations, political
instability, country''s economic, business conditions, etc.
you''ve read about the factors that cause stock prices to rise or fall, you''re
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market. Today, you can open an online trading account in minutes on trading
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