Factors Causing Stock Prices To Go Up

Prices of basic commodities including groceries, fuel and medicines have been going up at an unprecedented rate. The latest ZIMSTS report suggests that the country has recorded annual inflation hit 175.66%, up from 97.85% in May, the highest rate since the adoption of the multi-currency regime in 2009.

A number of factors contribute to this rise, and they may be related to the factors that can influence the prices of stock prices on the market. Below we present some of a bevvy of factors that influence prices of stocks on the market.

  1. The availability of more buyers than there are sellers on the stock market functions as an auction tends to drive the price upwards, increasing the market quotation at which investors can sell their shares. On the other hand, when the number of sellers outweighs that of buyers, demand for stocks tends to fall down and whoever is willing to take the lowest bid sets the price resulting in a race-to-the-bottom.
  2. Securities prices can also be affected by the performance of the industry in which the company operates. Any positive sentiments within a particular industry tend to push demand for stocks in companies that operate in that industry and vice-versa.
  3. Securities prices are also influenced by the general economic performance at any given time. That is why Stock Markets are often a good indicator of the state of the economy. Major political and socio-economic events that occur in the country can indirectly affect a company listed on an exchange.
  4. The market itself can influence the prices of stocks. When the market is on the rise, ‘bull market’, a stock may rise and when it is on a retreating market, ‘bear market’, it may fall.

More: News Day

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