Why do stock prices fluctuate?

1. Understanding the Demant/Supply Principle As the demand for watermelons goes up during summer and the supply cannot match up to the surged demand, watermelons become scarce in the market. Hence, retailers buy lemons at a higher price to cater to the swelling demand in the secondary market. This leads to an increase in the price of watermelons during summer. Therefore, a surge in demand plays an indispensable role in ascertaining the price. The stock market is no exception. According to the best stock broker in India, If the demand for a specific stock surges up for any reason, the stock price begins rising since every sale invites more bidders making it imperious for them to bid higher to purchase the stock. Factors that affect the stock price Investors who are able to determine the factors that control the stock prices are in a better position to reset their portfolios competently. Investor or market sentiment controls the demand. Even the top 10 stock brokers in India take into account these factors to precide the movment of stock prices in future. The professed risk of investing in a specific stock and/or the possible returns along with some additional conditions initiate investor sentiment. Therefore, you need to keep in mind all these factors to comprehend how stock prices vary. Here is a quick look at some of the major factors: Industry-based factors Any kind of major change in the industrial policy or any action taken by the government tends to affect the stock prices of the companies falling under that industry. For example, if the industry association has decided to increase the product prices, this would affect the stock prices of all the companies involved in the production. Business-level factors A share refers to an ownership in the business. Hence, any affirmative or negative company-related factors can influence the price of its stock.