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100 FAQ's on Basic Finance

Module Units

What makes stock prices go "up" and "down"?

Stock prices go up and down due to the demand and supply prevailing in the market.


If people are more inclined towards buying a stock then demand of that stock increases which leads to increase in the price of the stock. Conversely, if people want to sell a particular stock then supply of that stock increases which lowers down the price. 


Factors affecting demand and supply are as follows:

  • Interest rates;
  • Trading mentality of investors;
  • Dividends (profit earned through buying or selling a stock);
  • Political scenario;
  • Economic scenario; and Management decisions, etc.

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