Stock price movements boil down to one truth: supply and demand. More buyers than sellers? The price goes up. More sellers than buyers? Price crashes. That’s it. Everything else is noise pushing supply-demand balance around.
When Reliance Industries announces strong earnings, investors flood in wanting to buy—demand explodes, price jumps. When a competitor reports better numbers, holders panic-sell Reliance—supply floods markets, price drops. Supply and demand shifts respond to news, not charts.
Supply and Demand: The Core Driver of Stock Prices
The Three Drivers Behind Price Movement
1. Company Performance: Strong earnings growth attracts institutional money flooding into stocks. Disappointing earnings triggers selling waves. HDFC Bank crushing profit estimates triggers buying; weakness triggers exit.
2. Economic Conditions: Interest rate hikes by RBI crush stock valuations overnight. Recession fears cause panic selling across entire sectors. Booming GDP sends indexes soaring as companies profit from growth.
3. News and Global Events: A merger announcement ignites stock rallies; bankruptcy rumors spark crashes. War, trade wars, inflation spikes—all shake sentiment instantly.
Factors Moving Stock Prices: Earnings, News, Economy, and Sentiment
The Sentiment Problem Nobody Talks About
Market psychology destroys logic constantly. A company beats earnings but management sounds uncertain—stock crashes anyway. Another company misses earnings but guides higher future growth—stock launches upward. Expectations matter more than reality.
During the COVID-19 crash, profitable companies dropped 40% overnight because fear paralyzed buyers. Valuations didn’t change. Fear changed perception.
What Actually Moves Price Minute-by-Minute
In real trading, institutions move stocks—not retail traders. When mutual funds or pension funds decide to dump 10 million shares, supply explodes. Price drops until new buyers show up at lower levels.
Volume matters desperately. Price rising on heavy volume = conviction. Price falling on light volume = weak selling, likely to reverse.
Support and resistance levels act like speed bumps. Price touched ₹1,600 resistance but bouncing means sellers controlled that zone. Break through on high volume = new buyers entering above resistance.
Learn from the best with our Stock Market Courses in Delhi and gain practical knowledge to trade confidently and grow your wealth.
