Module 1 ยท Stock Market Basics
Prices are set by buyers and sellers meeting on an exchange, not by any single authority.
A stock exchange is simply a marketplace where buyers and sellers meet. The price of a stock at any moment is the last price a buyer and seller agreed on.
If more people want to buy than sell, the price tends to rise. If more want to sell, it falls. This constant tug-of-war is called supply and demand.
News about a company, the economy, interest rates or world events can shift sentiment and move prices. That is why prices are volatile - they reflect expectations, not just current facts.
Example: TCS
When TCS reports strong quarterly results, more investors want to own it, and the price often rises. If a global client cuts spending, sentiment turns and the price can fall even though the company itself is unchanged.
What mainly sets a stock's price on the exchange?
Can you recall a recent headline that moved a stock you know? What did it change - the company's actual business, or people's expectations?