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People take interest in such a market as one can expect easy and fast gains in a short period of time. At the same time these markets bring in a lot of fluctuation due to various factors. Some of the factors are mentioned below-
Political factors-
Political environment and development have a very pronounced effect on the stock market. Instability in the political conditions can upset the predictions of the stock market and lead to very confusing and unexpected results.
However, if the economy is strong enough to remain unaffected from the political situations then the stock market could rather function as per its own predictions. The reason is that each political party has its own economic policies. The stock markets react to these policies and therefore are significantly affected by the political conditions.
Local and Global Economic factors-
This is the most crucial factor affecting the movement of any stock market. Any kind of budget deficit or surplus will control the market moods. Changing inflation rates and financial developments of the nation have a direct impact on the index.
Stronger the economic system of a country, more the investments will be made by national and international entities.
Gross Domestic Product, employment rates and retail business amongst people will give reason to the investors to put in more and more money into the stock market.
Psychology of Market
There are period when people repose faith in stock market and they invest even the most secured savings too. They feel confident about their decision of making investments in the market. There are other instances when the global turbulence brings in lot distrust and investors are seen to be refraining themselves from taking out any money for stock market.
When the globe is perturbed then investors feel unsecured and start taking out their investments from the Market. Hence, psychology of the investor plays a major role in downtrend or uptrend of the market.
Expert Advice-
The experts of the stock market can attract or distract the investors leading to market fluctuations. People go by their advice and either start investing in a given stock or may take out their investment from a given stock.
Stock Market has always been unpredictable and fluctuating. The fluctuations do not depend on a single factor. There might be a combination of them or even a single one can lead to losses and gains.
This market where people can mint money in no time, they can lose it in a fraction of second too. One has to always be watchful and alert to prevent the losses. Tracing the market movements is the most interesting task one can come across.
Keeping a track of market swings due to some kind of political, economic or any reason is an art in itself.
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