Question

Prepare and submit a one page essay on what drives stock prices. You may want to write this essay on some experience you have had or you may want to reference some material that you have read about the factors that result in higher or lower stock prices. If you choose to write about someone else's work about stock market prices, be sure to include the source. In addition, regardless of your approach, end the essay with your personal opinion about the important factors that drive stock market prices. Please proofread your essay before submitting. Correct spelling, proper grammar, and clearly written sentences are expected.

Answer 1

ANSWER-

The stock market prices can be affected due to a number of reasons. Following are the factors that impact the stock market prices-

* Natural Calamities and Epidemics/ Pandemic- Due to globalisation, there is an interdependence of countries. So, happenings in one country strew in other countries. This impacts the stock prices as the companies are involved and their profits get impacted. Example- Spread of Pandemic.

* Political Impact/ Changes in Government Policies- As the government policies keep changing, it impacts the companies' external environment across the countries and thereby their profits as well. Example- Changes in custom duties by government.

* Social Impact- Limitation arisen because of religious believes, traditions, values of communities or groups in a country impacts the stock prices as well. Example- Some Pickles made in China are not acceptable in India.

* Investors' Feelings- Investors inklings also impact the stock market prices as some investors may be thinking that the future prices of stocks will rise and thereby may buy the stocks at present, whereas on the other hand, investors may be thinking that the future prices of stocks will fall sharply and thereby may sell the stocks at present.