The Factors Affecting Stocks And Moving Share Price
7 min read

Capturing the "bottom" point in any stock is the target of any investor or transaction. To do so, market participants need to understand the issues surrounding the business and the factors affecting stocks and share prices.

Below are the details of what stock prices are - which should be a concern when deciding to buy or sell. More importantly, each of the factors affecting stocks so that everyone in the community can learn how to value stocks for effective and profitable investment.


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What's The Share Price?

Before we go into the factors affecting stocks, we need to understand share prices. This is the price of an enterprise stock at a given time. Stock prices represent the amount of money an investor needs to own a unit of that stock.

Stock prices are the result of a lot of data to assess whether an enterprise is worth investing in or the financial status of issuers. It is the buyer's job to figure out factors affecting stocks and determine these share prices.

Two Most Popular Questions

** Why should you care about factors affecting stocks?

Understanding and evaluating the factors affecting stocks will be an important key to making decisions in the stock market. Before purchasing, the trader needs to study carefully, including analyses, to accurately assess the stock.

This will help you avoid the emotional view of stocks when investing. At the same time, investors will also have a stronger mentality in the face of disruptive information in the market. Looking closely at the factors affecting stocks, you can also see other values:

  • Real value of stocks: Stock prices do not always reflect the actual value of stocks. The valuation method should also be considered from enterprise indicators, income, net profit; financial statements; competitors, etc.

  • Corporate value: It is difficult to assess if you look only at stock prices or number of issues. Increasing core value increases corporate value and vice versa.

** Why do stock prices change every second?

Stock prices fluctuate in response to any type of activity, including official corporate news, speculation, or government-released economic data. It used to take a long time for new information to be reflected in share prices. However, with computerized stock trading, transactions may now be completed fast with a few mouse clicks. 

Factors Affecting Stocks 

1. Market and Economy

The first factor that influences stock prices is related to the global and domestic economy. Usually, stock prices tend to be proportional to the development of the economy. That means if the economy is stagnant, it will lead to the decline of businesses and reduce dividends. In a favorable economic case, the level of income and revenue from businesses also makes their stock prices more sustainable.

Investors can also compare efficiency through market indexes and business development. There are stocks that have negative growth during the year but are lower than market indexes such as S&P 500 internationally or VNIndex in Vietnam, proving that they are still winning the market.

  • Inflation: If the rate of inflation rises, investors may get concerned about the economy and sell some of their stock. If, on the other side, the inflation rate falls, investors may become more optimistic about the economy and increase their stock-buying activities. In other words, changes in inflation, whether good or negative, can have an impact on stock values.

  • Interest rates: Interest rates have a significant impact on how much it costs businesses to borrow money. If interest rates remain high, corporate borrowing costs may rise. As a result, company profitability may suffer, causing stock values to fall overall.

  • Consumer spending: Increased consumer spending can boost sales and earnings, and thus share prices, for a wide range of publicly traded companies. Similarly, a drop in consumer spending can have an impact on company sales, earnings, and stock prices.

2. Political situation

Changes in politics, society, diplomacy, military, ... can also be factors affecting stocks and their prices in the market significantly. These indirectly create a favorable or unfavorable operating environment for businesses and can cause volatility.

Policies to support businesses, economic reform or investment promotion, interest rate reduction will be implemented if the market is positive. Similar to the factors of population growth, income growth, increased consumer demand or changes in consumption trends can also create opportunities for businesses to increase stock strength.

On the other hand, political upheaval and social unrest cause war risks and reduce investment morale as well as investor confidence and cause a drop in stock prices.

3. Supply and Demand

Like all other goods in the economy, stocks represent businesses, so the law of supply and demand governs them - other factors affecting stocks. When a business has a good trading performance, many investors tend to invest in the business by buying shares.

On the contrary, when a sell-off occurs, it is a sign of bad business and the stock will drop sharply. If there is capacity, this will be a new opportunity for speculators to buy at a good price when the situation recovers.

This rule also affects the resilience of enterprises. Enterprises that are already large-scale, huge-capitalized, and long-standing corporations will hardly have the opportunity to double as young businesses. This can be easily understood when the profits go hand in hand with the risks.

4. Investor psychology

Whether performing well or structuring, the investor's final decision is still the most important when it comes to holding shares. The media information about the business has no small impact on the stock value because it also affects the psychology of the holders.

Disturbing information and media crises are also things that make the company's business activities will cause the stock price to fluctuate in a good or bad direction. Buy-out or sell-off can happen if the adjustment and settlement are

5. Financial Statement

One of the most obvious factors affecting stocks. The quarterly or annual reports published by an enterprise are evidence of its performance and its ability to continue in the future. The more transparent and professional they are, the more their stock prices will be interesting and selected by investors.

This factor that affects the stock price is the way to win the trust of investors who learn financial knowledge quickly and effectively, so it has a strong influence on the stock price.

6. Others

In addition to the factors affecting stocks mentioned above, there are also internal factors influencing share price movements that need to be mentioned such as:

  • Production techniques: Equipment and machinery, technology, research and development potential.

  • Consumption market: Competitiveness and market expansion.

  • Personnel: Quality of leadership, professional qualifications of workers.

  • Source of capital: The financial position of the business, including debt, investments, etc.


There are many factors affecting stocks. Short-term investors and traders, on the other hand, embrace and may even prioritize technical features. Long-term investors stress fundamentals while acknowledging the importance of technical factors. 

Fundamental investors might reconcile themselves to technical forces using the following popular argument: technical considerations and market sentiment frequently dominate the short run, but fundamentals will set the stock price in the long run. The result of success comes from both analysis and sensitivity to news and crowd psychology.

In the meantime, we can expect further intriguing advances in the field of behavioral finance, especially since standard financial theories appear to be incapable of explaining everything that occurs in the market.

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