Reasons Of Rises and Falls of Stock Market
Stock Market Goes Crazy At Uncertainty
What force the stock market to move ?
There can be a lot of possible answers to this complex question. Some time market moves are apparent to us , while some time other movers sneak up on us unfelt s. In this article, I’ll take a look at the political, economic, and social issues of any country that can be the main cause of changing market direction or its momentum.
Here is a list of the apparent causes that can affect the momentum or directions on any country’s stock market:
• Interest rates /Increase/decrease
• Oil Prices
• Price of Energy
• Serious domestic political turmoil:
Seeing that many of above mentioned causes have grave long-term implications, whereas others may merely cause temporary disruptions in the stock market.
However “uncertainty” which is not mentioned in the above list , is one of the biggest factor that drives the stock market extremely crazy. The market cannot afford surprises
when there is any possibility of any changing , market gets shocked by this uncertainty.
There is assumption that stock markets are “proficient”, meaning everyone has right to get the equal information altogether. Certainly it is not true.
For instance, the Open Market Committee of the “Federal Reserve Board ” expects increase in interest rates in its next meeting by one-quarter %, the market absorbs the rate increase factor into the prices of shares prior to the committee meeting. If the committee decision comes as per expectations , there will be little or rarher no market reaction. If the situation is different and the Federal Reserve Board increases interest rates up to one-half percent instead of one-quarter percent, the market may be reacting abruptly.
It is surprising that the economic news on any country or news about terrorism , war, as well as unexpected events upset the sense of control of any market and often deep fall is observed in the stock market. But, any good news may cause a big increase in prices.
Unfortunately it sounds like bad news in these days that capture almost all the headlines.
What do you mean ?
But most of the investors take these market bumps as just temporary bumps .They think that the market will get smooth soon, so they do not get panic .Nonetheless you should be aware about the mover factor of the markets. In view of the fact that these factors can give some good opportunities and some time problems.
If you get a chance to see a stock, but at that time you felt that it was costly to some extent , one off events of the market might just take an adequate fall in the stock and you may have the opportunity to buy it and and buying at that time must be right decision But if you want to sell your stock , you must check earnings reports of the stock c , Federal Reserve Board meetings and other expected events that might cutoff some points of your stock.