Today everyone has numerous goals and aspirations to achieve in life. And to reach these goals, everyone takes the necessary steps to achieve these goals. By making proper and careful financial planning, you can quickly check off one box from the list of your dreams.
To grow our wealth, various people start investing in the stock market with the motive of growth of investment and become rich, but while investing, they forget the part of learning, and due to this, they need to face loss. So before investing, learn about the stock market in the right way of investing by using fundamental and technical analysis at the best Stock Market Institute in Delhi.
In this blog, we will discuss some important factors affecting the stock market in India. So let’s begin the journey, read this article carefully and then make the right investing plan by checking all factors affecting the stock market in India.
Factors Affecting Stock Market In India
Below the complete list of the factors affecting the stock market in India is given.
Supply and Demand for Stock Market
When it comes to the factors affecting the stock market in India, then there are numerous factors. But from that list, demand and supply is the most basic one. Likewise, for other commodities, when there is a difference between demand and supply, then the price will increase. In the case of stocks, it’s the same. Let’s take tomatoes as an example of other factors. Suppose the scarcity of tomatoes increases and numerous buyers are lining up to buy tomatoes. In that case, the increase in demand increases the chances of an increase in the price of tomatoes.
Similarly, if any company performs well and gains profit continuously, then everyone wants to buy the shares of that company only. So it increases the shortage of shares, which increases the price of shares. And on the other hand, if there is a company that issues a lot of shares, but no investor wants to buy it, it will crash the stock price of that particular company.
Investors’ Sentiment to Stock Market
The sentiment of investors themselves can influence stock market prices. For example, if an investor invests aggressively by taking huge losses, the price of stocks will rise. Although on the other hand, if investors choose to invest safely, the stock price may fall. These two factors aspects:
- Bullish Market
Investors invest more aggressively by taking a considerable risk in a bullish market. When more investors invest with complete confidence, it increases the stock price.
- Bearish Market
In a bearish market, investors invest with a lack of confidence by taking low risks on their investments. Due to this stagnation in the market, it increases, and this results in the stock price being lower.
Interest Rates Affecting Stock Market
Reserve Bank of India’s decisions affect the stock market directly. RBI has decided on the interest rates, and they keep making changes in it to make the Indian economy stabilise. Gradually, the meaning of a higher rate of interest is that companies need to pay higher interest on their loans, resulting in lower profit. And due to this, the stock price will reduce.
If the interest rate is lower, companies can take loans from banks at a lesser cost. As a result, they can save money, resulting in higher profit. The price of stocks will go up if this situation occurs.
Political Factors Affecting Stock Market
The country’s political climate is one of the essential factors affecting the stock market in India. Government appearance becomes weak if the political environment is distressing. This kind of environment increases the risk of war, which can become the reason for stock prices to fall.
On the other hand, if the government performs well with the public’s support, then the stock price will increase and remain healthier. Investors can invest more confidently if the government introduces and follows good policies. If the government fails to apply better policies, it increases the fear among every investor investing, which may cause the stock market to fall.
Current Events that Affect Stock Market
With news and current events, the stock market can also be affected. For example, civil war, terrorism, and political interference are some events or factors affecting the stock market in India. All these factors make the price of stocks drastically affect market volatility.
Natural Calamities Affecting Stock Market
Earthquakes and floods are some calamities that affect the stock market drastically. Due to the destruction of property and assets, this happens. Due to these causes, the company leads to massive losses, and it becomes the reason for falling stock prices. Moreover, due to the breakdown of manufacturing and transportation of goods company’s sales get affected. That’s why the price of stocks is bound to fail whenever natural disasters occur.
All these risks can be minimised easily by joining the Stock Market Course in Delhi. So if you want to earn huge from the stock market, then enroll today in the best stock market course in Delhi at NIWS(National Institute of Wall Street)
Investing in stocks can give high rewards, but at the same time, they come with higher risks. But with some stock market knowledge, one can minimise that risk. And to gain higher earning timings, investing in the stock market also plays an essential role.