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Why do stock prices move up and down?
The main reason for movements in a company's stock price is due to supply and demand.
A share price goes up when...
A company is making huge profits.
Lots of people want to buy the shares to reap the rewards of the profits.
Not many people want to sell the shares.
There are not many shares left.
A share price goes down when...
A company makes some losses.
Lots of people want to sell the shares.
Not many people want to buy the shares.
There are excess shares.
However there are several external factors that affect a company's stock price. One factor that we are all witnessing at the moment is the credit crunch. Others include inflation rates, interest rates, job cuts, natural disasters, company mergers, changes in company management etc.
