Highlights: 1. Market to be choppy. 2. Book profit at regular intervals.
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Which are the factors that influence the price of a stock?
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1. INVESTMENT BASICS
2. SECURITIES
3. PRIMARY MARKET
4. SECONDARY MARKET
4.1 INTRODUCTION
4.1.1 Stock Exchange
4.1.2 Stock Trading
4.2 PRODUCTS IN THE SECONDARY MARKETS
4.2.1 Equity Investment
4.2.2. Debt Investment
5. DERIVATIVES
6. DEPOSITORY
7. MUTUAL FUNDS
8. MISCELLANEOUS
9. CONCEPTS & MODES OF ANALYSIS
10. RATIO ANALYSIS |
Broadly there are two factors: (1) stock specific and (2) market specific. The
stock-specific factor is related to people’s expectations about the company,
its future earnings capacity, financial health and management, level of
technology and marketing skills.
The market specific factor is influenced by the investor’s sentiment towards
the stock market as a whole. This factor depends on the environment rather
than the performance of any particular company. Events favourable to an
economy, political or regulatory environment like high economic growth,
friendly budget, stable government etc. can fuel euphoria in the investors,
resulting in a boom in the market. On the other hand, unfavourable events
like war, economic crisis, communal riots, minority government etc. depress
the market irrespective of certain companies performing well. However, the
effect of market-specific factor is generally short-term. Despite ups and
downs, price of a stock in the long run gets stabilized based on the stockspecific
factors. Therefore, a prudent advice to all investors is to analyse and
invest and not speculate in shares.
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