Factors affecting stock market prices in

If supply is relatively stable, prices can fluctuate higher and lower as demand increases or decreases. Production, sales and profits are higher and consequently share prices would increase. However, the converse is also true.

This announcement likely would cause the price of the stocks of military equipment and weapons manufacturers to rise due to an expected increase in defense contracts, which in turn can raise the value of stocks for companies that supply military equipment parts and technology.

The election of a friendly foreign government can move markets higher. For example, the Bank of Canada may raise interest rates to slow down inflation.

It often happens when an economy is in recession and unemployment is high, with rising prices. Importing companies, on the hand, are benefitted by hardening of the rupee.

Inflation and Interest Rates One of the more predictable influences of the stock market are periodic adjustments of interest rates by the U. Consequently, future cash flows may fall and expansion activities may take a standstill.

On the contrary, stock prices have maintained an upward journey. When inflation is at a low rate, the stock market responds with a surge in selling. In case returns offered by markets in other countries are attractive, then institutional investors would sell their securities in order to invest in those markets.

Economic and political shocks Changes around the world can affect both the economy and stock prices. Get a free 10 week email series that will teach you how to start investing.

This leads to credit expansion. And, in times of higher interest rates, investments that pay interest tend to be more attractive to investors than stocks. For the majority, however, the field is new enough to serve as the "catch-all" category, where everything we cannot explain is deposited.

Investors perceive it as an impediment in expansionary activities of business. Investors may buy more stocks thinking they will see future profits and higher stock prices.

Before the financial crisis ofa negative correlation was observed between the two. Many people and organizations have an interest in promoting particular stocks and industries to increase the value of their own shares and profits, and positive financial reports and stock market newsletters, Internet blogs, press releases and news reports can build high expectations for the performance of companies, which will raise the price of their stocks.

In the meantime, we can expect more exciting developments in the area of behavioral finance since traditional financial theories cannot seem to explain everything that happens in the market.

About the Valuation Multiple The valuation multiple expresses expectations about the future. This announcement likely would cause the price of the stocks of military equipment and weapons manufacturers to rise due to an expected increase in defense contracts, which in turn can raise the value of stocks for companies that supply military equipment parts and technology.

The fluctuations enable real price discovery. Historically, low inflation has had a strong inverse correlation with valuations low inflation drives high multiples and high inflation drives low multiples.

This often slows sales and reduces profits. In some cases the factors affecting stock prices can be traced to an actual event, such as stronger-than-anticipated profits.

Other times the market drivers are more obscure. Some factors that affect stock prices include world news, company news, market sentiment, supply and demand, company earnings, company mergers or takeover and dividends. Market Sentiment Public sentiment regarding the stock market can cause the market to either go up or down and consequently that can result in the rise or fall of stock prices.

Many kinds of factors affect the stock market. Social unrest can cause the market to drop, while a company discovering a new source of renewable energy can cause stock market prices to soar. Fundamental Factors.

In an efficient market, stock prices would be determined primarily by fundamentals, which, at the basic level, refer to a combination of two things: The perceived risk of. Many kinds of factors affect the stock market.

Social unrest can cause the market to drop, while a company discovering a new source of renewable energy can cause stock market prices to soar. Several economic factors affect the stock market that every investor should be aware of before getting involved in market investing.

The stock market is primarily the place where these companies get listed to issue the A study on the factors influencing stock price A Comparative study of experiential evaluation of stock prices and related important variables.

Financial analysis techniques like, Ratio analysis. The.

Factors affecting stock market prices in