Has the thought ever come to the back of your mind why do the prices of stocks fluctuate? TTML share price on a given day could be high and the rest day it could report a fall. Hold on! There are numerous factors that have a considerable say in the movement of stock prices.
Contents
Company–centric factors
A share relates to ownership in a company. So, any positive or negative related factors could have an influence on the share price of the company. They tend to include
- Any announcement related to the financial investment of the company that is likely to have an impact on the future earnings
- The launching of a new product or the recall of a product
- If there occurs a major change in the management of the company
- Any scandals or scams involving the company
- Layoffs or if the company happens to be in a hiring sphere
Industry factors
This can play a positive or negative role in the movement of share prices of a company. An example is that the incentives of the government when it comes to production-linked schemes in the automobile sector are beneficial for the sector in general. The moment such an announcement is that the prices tend to shoot up the share prices of the company.
Another example is that Jio came into the market in 2016 with its voice calling and internet-based services. The scheme was in existence for a year. Not only it went on to erode the customer base, but it did have a major impact on the financial performance of the company. For this reason, the existing share prices of the various telecom companies reported a fall. Such industry-centric factors could have a major impact on the fluctuating share prices. So you need to have an idea about the same when it comes to the movement of share prices.
Market trends
Both these terms are common when it comes to the share market. They cannot be rated to be events, but they are phrases that have a major impact on the fluctuating value of the share prices
- The bull phase is a phase where the investors are optimistic about the movement in the share price of a commodity. Even their confidence in the economy tends to be strong. They make an investment at a massive level leading to an increase in the share prices.
- Bear phase- the opposite of the bull phase is the bear phase. Here an investor is worried about the future price along with how the growth of the economy may pan out. One of the better examples is the existing market crisis as there is bound to be a degree of uncertainty when it comes to market recovery. For this reason, the prices of stock did report a major fall in the last few years.
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