Question

Factors that result in higher or lower stock prices?

What drives stock prices?

Important factors that drive stock market prices?

500 words minimum

Answer 1

All question looks same and somehow related to each other. Thus I will give answer for each question one by one:

1.Factor responsible for the higher stock prices:

a) Company performance: Most important factor for any stock price rise is its companies performance over the year, if the company is performing well than then it will reflect in the price of stock.

b) Different financials data: If company is putting good financial figure year over year than there is huge chances that the company stock will be performing well.

c) Corporate Governance: Governance structure of any company is more important than the financial data or company performance data because if there is no faith on the company's management and board of directors then there is huge chance that company will not perform well and if there is trust and respect to the corporate governance of the company then the stock price of company will rise.

d) Outlook of company: Future prospect and outlook of the company is very important in case of stock price valuation thus a company with good future prospect performs well and its reflect in its stock price as well.

e) Sector Outlook: If the stock belongs to the sector which is going to perform well in the future then there is huge chances that the stock price will rise for the company.

f) Macroeconomic Outlook: It is also one of the very important factor which decide the price of stock price in long run. If the overall economy is going to perform well than the stock is going to do good.

Factor responsible for the lower stock prices:

a) Company performance: Most important factor for any stock price rise is its companies performance over the year, if the company is performing bad than then it will reflect in the price of stock and it's price will fall.

b) Different financials data: If company is putting bad financial figure year over year than there is huge chances that the company stock will be performing bad.

c) Corporate Governance: Governance structure of any company is more important than the financial data or company performance data because if there is no faith on the company's management and board of directors then there is huge chance that company will not perform well and if there is no trust and respect to the corporate governance of the company then the stock price of company will fall.

d) Outlook of company: Future prospect and outlook of the company is very important in case of stock price valuation thus a company with bad future prospect performs bad and its reflect in its stock price as well.

e) Sector Outlook: If the stock belongs to the sector which is going to perform bad in the future then there is huge chances that the stock price will fall for the company.

f) Macroeconomic Outlook: It is also one of the very important factor which decide the price of stock price in long run. If the overall economy is going to perform bad than the stock is going to do bad.

2. There are many factors which drive the stock price either it will go up and down depends on these factors these factors are same which I discussed above apart from that there are key financial metrics like growth rate, dividend payment, valuation, etc., also determine the price of stock.

3. There are many important factors that drive stock market prices like:

a) Different stocks in the stock market which form the index.

b) Performance of overall economy.

c) Monetary policy of fed also impact the stock market price, because increase in interest rate will increase the prices of the stock.

d) Fiscal policy set by the government.

e) Political and legal structure of the economy.