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The above figures are taken from the website of National Stock Exchange of India. They illustrate the movement of NSE stock indices as well as world stock indices on the date indicated. What factors affect the movement of stock indices? Elaborate on the nature of these factors. |
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Answer» The fall in the domestic market, as given in the above table, can significantly be attributed to the market sentiments of world market. We can see that the world indices and NSE indices are moving in the same direction. Some other factors which affect the movement of stock indices are: (i)Demand and supply of vatious shares. (ii) Earnings of the companies. (iii) Growth prospects of the companies. (iv) Speculation. (v) State of economy,whether there is boom, depression , etc. (vi) Political stability and decisions. (vii) Financial institutions support. (viii) Economic factors like, bank rate, inflation, etc. |
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