Are you trying to get your basics right before delving into the Indian stock and equity market scenario? That is as good an idea as any. Getting educated about your investment options when it comes to stock trading is definitely useful in a fast moving market like India. If you are just starting out, you may wonder what the factors are that affect the market. This article will discuss this.
- Internal factors: The stock of a particular firm may rise or fall due to internal factors. There can be many such internal factors such as acquisitions, mergers, suspension of dividends and earning reports. The stock of a firm will rise or fall the most drastically in case the change has been completely unexpected and out of the blue.
- Current world affairs: This is a very important factor that moves the Indian stock and equity market. World events happening across the globe decide which stocks are going to fall and which ones are going to rise. Terrorism, civil unrest, war and natural disasters are just some of the events that may affect the stock market of a country. For instance, an event such as September 11, 2010 not only rocked the consciousness of the whole world, but also affected the stock and equity trading in almost all countries. There can also be indirect effects of world affairs on the markets.
- The Indian Budget: The Indian Budget is one of the most important economic happenings that affect the country every year. It is at this time of the year that the prices of goods and services are known for one year. After the Indian Budget is presented, it is expected that the stock and equity market will witness a change, with prices of stocks rising and falling.
- Exchange rates: The foreign exchange rate of the Indian currency is another factor that affects the Indian stock and equity market. The amount of value that is accorded to the Indian currency determines what kind of rise and fall the stocks of companies are going to witness.
- Inflation: No matter how much the government tries, inflation is something India has to deal with. Inflation is also something that determines how the Indian stock and equity markets are going to work. In case there is an inflation in prices, the prices of most stocks will go up. In case a deflation occurs, the vice versa is something that can be expected.
- Hype: This may not seem like a very important factor that affects the stocks of companies, but the opposite is true. When there is a lot of hype as to a particular company launching or a company releasing a new product, chances are that its stock will rise. But such hype will not withstand the test of time. So hype may be a temporary factor but it is hardly a permanent one that affects the Indian stock and equity market.
As you can very well see, there are a wide variety of factors affecting the stock and equity market in the country.
Author-Bio : Shabbir learned the art of making money from the market the hard way, i.e. loosing the hard earned money and then learning it but he don’t want the same process to repeat for others and so he shares how retail investors can learn technical analysis and chart patterns. Check out his collection of free tutorials on Technical Analysis on his blog shabbir.in