Tags: how share price increase or decrease , why there is fluctuation in stock market , causes of fluctuation of prices in stock market , why do stock prices change every second
We often think why the prices of shares go up and down. Why is there a quick change in prices for every share of companies? So, to understand this we need to understand the factors which mostly change the price of shares.
a. Buyers & Sellers: Buyers & Sellers of the share play a major role in the change of its price. If the number of buyers is more compared to the number of Sellers then the price of the share will rapidly increase. On the other hand, if the number of seller is more compared to the number of buyers then the price of the share will gradually go down.
b. Any news on Company: Any news on that particular company effect the price of its share. Good news for the company are- profit on last quarter, merger with bigger brand, announcement of dividend, introduction of new or monopoly product etc. These good news increases the price of the share. Bad news for the company are- loss on last quarter, demerger from parent company due to loss of main company, introduction of non profitable product etc. These bad news decreases the price of the share.
c. Any news on sector: Any good or bad news on a particular sector affects the price of every share on that sector. For example good news for pharma sector will help to increase in price of all the stocks in pharma sector. On the other hand, bad news for pharma sector will lead to a fall in the price of all the stocks in pharma sector.
d. Any government policy: Government decisions and policies also play a major role in fluctuation of prices. A change in tax by government will result in the change of profit of companies which may result in fluctuation in stock prices. Any decision by government on a particular sector may result in price fluctuation of stocks on those particular sectors.