Key Factors Influencing Stock Market Trends

Capital Markets CIO Outlook | Monday, July 20, 2020

Stock markets are often affected by geopolitical events. For example, an event in the neighboring country can have a substantial impact on the stock market as it can manipulate trade and the economy

Fremont, CA: The movement of stock markets are quite unpredictable, which means they do not move in a single direction. One moment they are up, the next moment they drop. Therefore, predicting the stock market can be somewhat tricky as it is affected by a lot of factors.

Let us look at some factors that influence stock market trends:

Geopolitical Events

Stock markets are often affected by geopolitical events. For example, an event in the neighboring country can have a strong impact on the stock market as it can manipulate trade and the economy. Also, several affairs in developed economies of the world can influence stock market trends, such as the US, which can impact the stock market as many investors trade in stocks that heavily invest in global companies. That way, global happenings can control the stock market movement widely.

Government Policies

The policies undertaken by the Government has a direct impact on stock market trends. Mostly, this is because the policies can influence investors’ sentiments and the entire economy directly. If the policies are considered favourable by investors, stock markets rises. On the flip side, if they are deemed to bring down investors’ confidence, it negatively affects the market.

Developments within Companies

Internal developments within companies are also a potential influencer on market trends. Developments regarding mergers and acquisitions, earning reports, and appointments can determine stock market movements. If the development is related to a prestigious company, then it can have a strong impact on investors’ sentiments. Previously, there have been cases where an event in a big company had a significant impact on the entire stock market.

See also: Top Digital Marketing Consulting/Services Companies

Digital Marketing