Question
Class 7Social ScienceBanks and the magic of Finance

What factors affect share prices in the stock market?

Verified Answer

Share prices are affected by company performance and external factors. If a company performs well and earns profits, its shares become valuable; problems like bad products or losses decrease prices. External factors include government policy changes, new laws, tax rules, political instability, wars, and economic shocks like natural disasters, pandemics, or sudden policy changes. These factors cause share prices to fluctuate, bringing gains or losses.