Stock Market Learning Blog


Friday, May 15, 2020


                                Hi, all are you new to the stock market then I think you have a confusion about why do share price fluctuates ups and downs? You should need to know about why price fluctuates what are the reasons, am clearly explains about why the share price fluctuates as follow

There are an only one things to know about why the price rise and falls because of demand and supply, every day we see the market movements it continuously fluctuates, because of supply and demand of the company share,

Supply and demand determine the share price of a company if more people interested to buy a share on a so-on-so company the demand increases then automatically the share price rises if more people use to sell the shares of a company the supply increases the demand decreases then automatically share price falls

But they have some reasons to why supply and demand changes because there are many reasons behind every share like traders emotion, company financial condition, any other factors, will be applicable for to that.

I hope this article may help you, I give a basic overview of why share price fluctuates. They have some reasons below

Major reasons for fluctuation:

  1. Company related factor :

When the share price goes up’s and down’s are related to company factors, important news regarding the company as positive and negative it will affect the share price, and company financial situation also effects on the share price

Because if the company financial situation play a crucial role in determines the share price it defines the revenue and expenditures, company profitability, the company growing levels in future etc…

When the news regarding positive about the company more number of peoples will show interest to buy the share if the news regarding about company in negative people will not interested to buy the share when the news is neutral people will uncertain. And the company announces to start a new venture and mergers, acquisition.

  1. Government related factors:

There are various factors effects on share price when a government changes policies, interest rates, new schemes, increases tax rates etc…and inflation will be affected and it affected by national and international political and economic issues, changing the government…

  1. Psychology of traders and investors :

Mainly stock market runs on emotions and sentiments of traders and investors, the investment decision is impacted in two things fear and greed if the fear starts people will sell the shares and decreases the share price, and if greed will take on hold to booking profits in a profitable manner.

There are some more reasons behind the share price fluctuation. but this is the main reasons applicable.

Why demand increases (share price goes up):

  • When news regarding the company in a positive manner (reports, reduce debts etc...)
  • Strong financial situation( increase revenue, profits, sales growth)
  • Announce a new venture and new reforms in company policies

Why supply increase:

  • When news regarding negative about a company
  • Poor financial strength and high debt
  • Low financial situation (decreases revenue, sales growth)

There are more number of great philosophers and investors tell it’s not easy to predict the share price, its only depends on market sentiments and the financial situation of a company…

Hope it helpful ….

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