Investment into securities listed on the stock market helps investors to indulge in wealth creation in the long run. However, investors must first open a demat account, select a dedicated trading platform, and understand the various rules and regulations concerned with stock market investment. Moreover, investors must be aware of the various tools, technical and fundamental indicators, and other associated aspects that can help with the analysis of the best securities for investment. Certain factors even influence the movement of stock prices listed on the stock market which the investors must understand to make future predictions. These are listed below:
Changes in the global market
Apart from the regional stock market, changes in the global market influence stock prices to a great extent. Even a small change in the global index like NASDAQ or Nikkei can affect the stock prices of the Indian stock market. Investors must therefore carefully analyse changes in the global market index to protect the next day’s price movements. A positive change in the global index can help push the stock prices further the next day and even vice versa.
Effect of economic reports
Economic indicators like GDP even affect the stock market and its underlying securities. Quarterly and half-yearly economic reports of total GDP, unemployment rate, manufacturing index, exports, foreign direct investment, and even fiscal deficit can help investors in analysis and predict the next day’s stock price movements with accuracy. A fall in GDP, total manufacturing, exports, and FDI can lead to negative price movements in stock prices. On the other hand, a decrease in the unemployment rate and fiscal deficit can boost investor confidence which in turn results in a positive change in stock prices.
Company-specific news:
Prices of stocks listed on the stock market or directly proportional to the individual company news, announcements, and earnings. Positive news like an increase in revenue or investment from foreign investors can push the stock price further. On the other hand, in negative news report or announcement can lead to a sudden fall in the stock price. Investors must therefore carefully analyse the daily news and articles associated with various companies for accurate share market prediction for tomorrow.
Geopolitical events:
Events all across the world can even affect the stock market. Outbreak of a virus, protest by workers of a well-known manufacturing plant, sudden war, and even international conflicts can result in high volatility in stock market prices. Investors can predict the next day’s stock price movements through careful analysis of political events published on online news websites and even newspapers.
Investment activity of foreign and domestic investors
Foreign direct investment or FDI and domestic investment by top investment houses and companies can even help investors predict price movements with accuracy. An increase in both FDI and DII serves as positive news for the stock market price movements. Investors increase their stake in stocks upon the inflow of foreign investment and an increase in the overall volume of trades. Careful analysis of FDI and domestic institutional investments can help investors predict the next day’s stock market price movements.
Conclusion
Predicting the future of the stock market is difficult due to the influence of various factors which are beyond the control of individual investors. However, with careful examination and analysis over a long period, investors can make informed investment decisions and even predict tomorrow’s stock market price movements.
