Forces that move stock prices By David R. Harper Updated August 5, — 8: Stock prices are determined in the marketplace, where seller supply meets buyer demand. But, unfortunately, there is no clean equation that tells us exactly how a stock price will behave.
Other times, a share price can be buffeted by external events that the company has no possibility of influencing. Corporate earnings and the ability to exceed Wall Street expectations can move shares in a positive direction.
When earnings are passed back to investors in the form of dividends, this also can boost share prices. Unexpected losses or a failure to reach revenue or profit targets can lower value. Company Management Part of shareholder value comes from investor confidence in management.
Political instability in a location where a company operates can cause investor confidence to decrease. A recession or depression may have the same effect, while an economic boom can increase the share price of companies.
Regulation and Competition Companies can find their share price affected if regulatory changes are perceived to affect value or if a new entrant into the marketplace changes the competitive landscape.
For example, a company that relies on low-wage labor can find its stock price lowered if investors believe labor costs will rise with a pending minimum wage increase. The share price of a smaller company can be impacted if a larger, more-established competitor enters the marketplace -- or if a rival goes out of business.
Belief in the Business Sometimes, the biggest factor influencing a stock price is investor belief in the company and its ideas. Businesses with nothing on their financial record but heavy losses can still be valued highly because the product or service they offer catches the fancy of shareholders -- especially in technology-based ventures where innovation is prized heavily.
While these stocks may fluctuate wildly, the lure of the long-term reward may outweigh the risks for some investors, which is reflected in the share price.Factors Affecting Share Prices What are the major factors that affect share prices in the stock market?
This is one of the most frequently asked questions by stock market participants.
It is meant to study the various factors that influence its share price fluctuations in the short term and the growth-related or contraction-related trends over the long term. Woolworths Holdings Limited (WHL) is the company chosen and the period of the research study is February – February Factors Affecting Share Prices What are the major factors that affect share prices in the stock market?
This is one of the most frequently asked questions by stock market participants. There are varied internal and external factors affecting the price of a share. Countless factors affect the share price of a company's stock.
Some of these fall directly under the company’s control or reflect the perception of the strength of the business itself.
Other times, a share price can be buffeted by external events that the company has no possibility of influencing.
Even though many factors influencing, company specific variables such as earnings per share, firms book value, A study on the factors influencing stock price A Comparative study of affect the market price of the share in the positive direction.
Factors Affecting Share Prices September 28, by Rajandran Leave a Comment Like any other commodity, in the stock market, share prices are also dependent on so many factors.