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Analysis for Factors Effecting Stocks’ Prices

Stocks’prices can be effected by many factors,the main

factors are as following:listed company’s operation

situation,industry conditions, microeconomic environment, policies of

government, force majeure effections, psychological changes of

investors, international economic environment.These are the main

factors which will cause the fluctuation of stocks’ prices.

Listed company’s operation situation is the decisive factor of

stocks’ prices.First,company’s management level has a great effect

on the stocks’ prices,a listed company with a high management level

will achieve great results and the stocks’ prices will also be

high.Second,financial situation is another import aspect of operation

situation,which will determine if the situation of cash flow is good

enough.Third,competitienes is also a good reflection of company’s

operation situation,if one listed company possess high

competitienes,this company may obtain large market share and earn

more momey.In one word,company’s management level,financial

situation and competitienes are all important aspects of listed

company’s operation situation,which will effect stocks’ prices

eventually.

Industry Conditions is another important factor effecting stocks’

prices.The first important aspect should be industry FIRST DRAFT

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classification.Different industries will have different profit rate,thus will

generate different stocks’ prices.For example,in China,banking industry is

one of the huge profit industries.Industry’s sustainability also have great

effect on stocks’ prices.People may consider that a sustainable industry

may have a better prospects and prefer to buy the stocks of such

industries.Industy’s life cycle of course is very important factor.If the

industry which a listed company belong to is just in the intial stage,its

stock may have good value,but it is in the decline stage,the investment is

likely to fail.In conclusion,insusty classification,industry’s sustainability

and industry’s life circle are all important factors effect the stocks’

prices,a stock which belong to a sustainable developing industy

Macroeconomic environment has great effect on stocks’

prices.Firstly,the macroeconomic growth will effect the general growth

rate of stcocks’ prices.If the the macroeconomic is good,all the stocks’

price may grow.Secondly,the economic cycle is another important

factor.If the economic is in the rising stage,the stocks’prices may be

high.The last but not least one is Inflation level.If the inflation level is

high,the stocks’ price may high because everything is expensive.In

conclusion,the macroeconomic growth,the economic cycle,the inflation

level are all important factors of macroeconomic environment,which are

all will effect the stocks’ price.

Policies of government always effect the stocks’ prices as an FIRST DRAFT

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important external factor.It include fiscal policy,monetary

policy,export-import policy.The fiscal policy always effect the stocks’

pirces by effecting the supply and demand in the stock market.The

monetary policy always do the effecting by changing the interest

rate.While the export-import policy may effect the enterprises which is

professional in export-import businesses.In one word,the fiscal policy,the

monetary policy and export-import policy all can effect the stocks’ prices

by different ways.

Force majeure effections always be sudden and people have no

way to keep far from them.The first one should be war.If the location of

one listed company was in the war suddenly,its stock price may fell down

sharply and people have no way to rescue it in the short term.The

second serious force majeure effections should be natural disasters.Take

the earthquake as a sample,once the earthquake happened,the listed

company in the earthquake zone will be ruined and the value of its

stocks may be zero in one night,of course the price will be fell down

very soon.The third one should be political events.A positive political

event may raise the stocks’ price and a negative event may low the

stocks’ price.Force majeure effections such as war,natural disasters and

political events may have great effects on stocks’ prices.

Investors in the stock market may also have effect on the stocks’

market by their psychological changes.The optimistic feeling of the