Chapter: 5 Investing in Stocks

Section: 8 What Influences The Share Price Movement?

It is important to know as an investor the underlying reasons for the price behavior of stocks. In general, stock prices change due to market forces i.e. demand and supply. If more people want to buy a stock and proportionately less investors are willing to sell, then the price of that particular share will go up. The most important question is what makes investors seek buying or selling a stock. The answer for this question is not straightforward and there are a number of factors that influence stock price movement.