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Why is the stock price high or low in the STOCK MARKET?

Friends, often this question also comes in the mind, why the price of stock in STOCK MARKET is less or more? What is it that the prices of shares keep decreasing and increasing?

Today we will understand that what is the reason behind the ups and downs in the SHARE MARKET?

The most important task of the STOCK MARKET is to create a MARKET PLACE, where both the buyers and sellers of shares are always present.

And in INDIAN STOCK MARKET BSE and NSE are playing their role as STOCK MARKET very properly.

Changes in the price of shares – DEMAND AND SUPPLY

STOCK MARKET is such a MARKET PLACE, where there is always a DEMAND of BUYER and SELLER to buy and sell shares, who want to buy and sell shares.

And DEMAND (demand) and SUPPLY (supply) have the main role in running any market, and thus the ups and downs are seen in the STOCK MARKET only by the rule of DEMAND and SUPPLY,

When the demand for SHARES is high, the price of SHARES increases, and when the demand is low, the price of SHARES decreases.

And due to the decrease and increase in the prices of shares, there are ups and downs in the market index i.e. BSE-SENSEX and NSE-NIFTY.

Change in Share Price – View on the Share

In STOCK MARKET it is estimated only on the basis of data and past facts, what will be the price of SHARES in future, everyone can have different opinion about the same STOCK.

Someone wants to buy it and someone wants to sell it, and with this different view of buying and selling, people place orders to buy and sell STOCK in the STOCK MARKET.

And the STOCK MARKET always keeps on working due to these different views of the people and the rule of DEMAND and SUPPLY on the ORDERS, and when the demand is high, the prices increase and when the demand is low, the prices decrease.

Any person in STOCK MARKET can be right or wrong according to his guess, no one can always make perfect guess, STOCK MARKET only explains everything, the rest of the ups and downs in STOCK MARKET Can’t tell exactly

In this way, we can understand that the people who participate in the STOCK MARKET, i.e. the people who buy and sell the STOCK, a STOCK MARKET is formed and the rule of DEMAND and SUPPLY starts working between these buyers and sellers. Due to which one can see ups and downs in the share price,

Some reasons for the ups and downs in the stock market

Although there can be many reasons for the ups and downs in the stock market, some of the main reasons are as follows.

  • News – (POSITIVE AND NEGATIVE NEWS FROM GOVERNMENT) – From time to time, governments make plans for the development of different areas through their policies, as soon as any such news comes that the government is going to plan development in a certain area, then that More buyers come towards the shares related to the sector, because it is expected to make more profit to the companies, and due to the purchase of more people’s shares, the price of that company’s shares increases, and vice versa if ever. If the NEWS is NEGATIVE, that is, if the sector is not favorable, people want to sell the shares of the company associated with that sector, which reduces the prices of that company.
  • RESERVE BANK OF INDIA (RBI)- Policies of –
  • government policies
  • Company’s ability to earn profit
  • Company’s own policies

In this way there are many other reasons which are many other reasons for the ups and downs of the STOCK MARKET, due to which something always happens in the STOCK MARKET and it goes on continuously.

Hope you have understood how the STOCK MARKET works.

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