Summarize the major factors affecting stock price?
Answer:
Investment in stock market is uncertain, because stocks respond to various internal and external influences. Any of these considerations too, are beyond investor influence. Volatility is an integral part of the investment in the stock market, and if not managed well, it might end up in losses.
The following are the major factors affecting the stock price,
Supply and demand: This is one of the most important variables influencing the prices of stocks. Imbalance between demand and supply can have a considerable impact on stock prices. If there is a demand for a given company’s product and its supply is less than the price will increase and vice versa.
Interest rates; Interest rates are another aspect influencing share prices. If a company borrows capital to increase and develop its business, higher interest rates would impact its debt costs. It will have an impact in company’s profits and as a result the share price will decline.
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