Why is the stock price more or less low in the stock market?
Friends, the question of why the stock market’s stock price fluctuates frequently comes to mind. Why does the price of shares continually increase and decrease?
Today, we will determine what, ultimately, is the cause of the fluctuations in the SHARE MARKET.
The primary function of the stock market is to establish a marketplace where buyers and sellers of shares are always present.
And in the Indian stock market, BSE and NSE play their roles as stock markets exceptionally well.
Variation in Share Price – DEMAND AND SUPPLY
The stock market is a marketplace where there is always a demand for buyers and sellers who wish to purchase and sell shares.
And DEMAND (demand) and SUPPLY (supply) play a significant role in determining the direction of any market; consequently, the stock market volatility is solely a result of the rule of DEMAND and SUPPLY.
When DEMAND for SHARES is high, the value of SHARES rises, whereas when DEMAND is low, the value of SHARES falls.
The market indexes, i.e. BSE-SENSEX and NSE-NIFTY, also fluctuate due to the decrease and increase in the price of shares.
Variation in share price – Attitude toward the share
On the STOCK MARKET, only estimates based on data and past events are used to predict the future of SHARES, and everyone can have a different opinion about the same stock.
In the stock market, people place orders to buy and sell stock based on their differing views of buying and selling.
And with these diverse perspectives of the people and the rule of DEMAND and SUPPLY over the orders, the stock market always functions; when demand is high, prices rise, and when demand is low, prices fall.
In the STOCK MARKET, a person’s guess can be right or wrong, and no one can always guess correctly. While the STOCK MARKET explains everything, others explain the ups and downs of the STOCK MARKET. Not certain exactly
Thus, we can understand that those who participate in the stock market, i.e., those who buy and sell stocks, become the stock market, and that the rule of DEMAND and SUPPLY begins to operate between these buyers and sellers, causing the share price to fluctuate.
Among the reasons for stock market volatility are
In addition, fluctuations in the stock market can be caused by a number of factors, including those listed below.
- News – (POSITIVE and NEGATIVE GOVERNMENTAL NEWS) – Governments occasionally make plans for the development of different areas through their policies. Whenever it is announced that the government will plan for development in a particular area, more buyers flock to the sector’s shares, since companies are expected to make more money from it. As a result of the increased demand for shares, the price of the shares of that company rises, and vice versa. When NEWS is negative, i.e., if that area is unfavorable, people want to sell the shares of the associated company, resulting in a decrease in the price of those shares.
2.Policies of RESERVE BANK OF INDIA (RBI)
3.WORLD ECONOMY (GLOBAL ECONOMY IMPACT)
5.Profitability potential of the business
7.DIRECTION OF THE COMPANY
Similar to this, there are numerous other causes for the ups and downs of the stock market, which is why there is always something happening on the stock market and it never stops.
I hope you comprehend how the STOCK MARKET operates.