Fri. Jan 24th, 2020

How to stock price increase and decrease in the stock market?

How do price increase and decrease in the stock market?

Friends, this question often comes to mind, why is the stock price less in the stock market? What is it that the prices of shares keep decreasing and increasing? Today we will understand what is the reason behind the stock price increase or decrease?

The main job 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 well,


A stock market is a market place where buyer and seller always have demand to buy and sell shares, who want to buy and sell shares, And demand and supply play the main role in running any market, and thus the rule of demand and supply itself shows stock price increase or decrease.

When the demand for shares is high, the shares of share increase, and when the demand is low, the shares of shares decrease, And due to the decrease and increase in the prices of the shares, the market index ie BSE-SENSEX and NSE-NIFTY also shows ups and downs,

Share Prices Change – Share Attitudes

In the stock market, it is only estimated on the basis of data and past facts, that what the shares of a share will be next, everyone can have a 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 put order to buy and sell stock in the stock market,

And with these different attitudes of people and the rules of demand and supply over orders, the stock market always works, and the price increases when demand is high and the price decreases when demand decreases,

Anyone in the stock market can be right or wrong according to his guess, no one can always make a very accurate guess, the stock market only makes everything clear, other than the fluctuation in the stock market. Can not tell exactly,

In this way, we can understand that the people who participate in the stock market, ie, the people who buy and sell a stock, become a stock market and a demand and supply rule works between those who buy and sell. , Due to which the stock price can get ups and downs, stock price increase or decrease

Some reasons for fluctuations in Stock Market

Although there can be many reasons for 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, the government makes plans for the development of different areas through its policies, as soon as any news comes that the government is planning for development in a particular area. There are more buyers to the shares associated with the sector, because this is expected to benefit the companies more, and by purchasing more people shares, the shares of that company are also expected And they increase, and vice versa, if ever news is negative, that is, if the region is not favorable, then people want to sell the shares of the company associated with that area, due to which the prices of that company are reduced,
  • The economy of the world (GLOBAL ECONOMY IMPACT)
  • Government policy
  • Company’s ability to make a profit
  • Company’s own policy
  • Management of Company
  • In this way, there are many other reasons which are other reasons for the fluctuation of the stock market, due to which something always happens in the stock market and it continues continuously,
  • India is an agricultural country. If the meteorological department anticipates good monsoon rains, the stock market picks up. Investors predict that good rains will lead to higher production of food grains. This means that the growth of the agro-based industry will be more. These industries include tractors, fertilizers, seeds, pesticides, bikes, and FMCG companies. Investors feel that the business and profits of these companies will increase. The purchase of shares of companies associated with them increases.
  • If the Reserve Bank reduces the interest rate in the declaration of monetary policy, then the rate of the loan will be cheaper. This will increase the number of people taking loans from the bank and in the end, the benefit of the banks will increase. Because of this, investors buy shares of banks and NBFC and their price rises.
  • Shares of companies linked to these sectors due to any changes in the monetary review of RBI (decrease or increase in interest rate), the fiscal policy of the government (rapid rate of tax rates), commerce policy, industrial policy, agricultural policy, etc. There is a fluctuation in the sense of.
  • Changes in interest rates by the US central bank Federal Reserve is under worldwide watch. Investors believe that if interest rates rise in America, then foreign investors will come out of the market like India and invest there. Due to this, selling starts in the stock market here. This causes weakness in the market.
  • International developments also affect the price of shares. Due to the feared war due to the recently launched trade war, North Korea dispute, Russia-US dispute, investors withdraw money from the shares and invest in gold. Due to this, the price of shares fluctuate.
  • Stock prices are also up or down due to positive or negative announcements made by the government during the presentation of the budget.
  • Due to political stability (majority government or coalition) in the country, the political environment also influences the decision of investors to a large extent. The state assembly results also affect the stock market. With the victory of the current government, there is confidence in the continuation of its policies, due to which investors start shopping, which leads to a boom in the market.
  • Because of the herd effect, more selling or buying is done in the stock market. Due to this, sometimes there may be some rumor or secret information. Stocks fluctuate due to simultaneous selling or buying in large numbers. Sometimes stock market fluctuations are also due to fear or uncertainty.

Hope you have understood how STOCK MARKET works,

Check out our previous post – What Is Share or Stock Market

Leave a Reply