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Stock prices change every day by market forces. But have you ever wondered about what drives the stock market—that is, what factors affect a stock's price? Why at one point in time do we see the bullish phase and at another bearish one? To put it simply,  if more people want to buy a stock than sell it, then the price moves up. Conversely, if more people wanted to sell a stock than buy it, the price would fall.

Nithin Kamath, the chief executive officer of India’s largest online brokerage Zerodha explains what really moves markets? It’s traders & investors making informed and uninformed decisions behind the bear and bull markets. 

“We keep hearing stuff like Nifty looks like it wants to go lower or it'll bounce back. We make market moves sound almost human. What really moves markets? It’s traders & investors making informed & uninformed decisions. Everything else is hocus pocus," Nithin Kamath said in a tweet sharing an article titled ‘The Dangers of Anthropomorphizing the Market’.

 

His tweet came on a day when the Indian equities markets tumbled with the benchmark Sensex crashing 1400 points leading to nearly Rs.7 lakh crore loss to the investors' wealth within a couple of hours of trading.

What moves the market? 

It’s traders and investors making informed and uninformed decisions. “They use sophisticated technical systems, complex fundamental approaches, tips, hunches, guesses, bad information and even astrological signs to make their decisions to buy, sell, or stand aside. All the educated and uneducated conjectures are tossed in the pits and the market is pushed or pulled to a higher or lower close," the article says.

On Saturday, Nithin Kamath expressed fear regarding the sharp drops in stock prices of listed new-age technology companies around the globe.

The benchmark Sensex rose more than 20% in the first 10 months of this year, aided by the Reserve Bank of India’s efforts to pump funds into the economy and steady buying by millions of first-time investors. 

 

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