What factors effect the movement of stock indices?
Elaborate on the nature of these factors.

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Solution

The factors which affect the movement of stock indices are:
(i) Demand and supply of various securities
(ii) Financial position of the company
(iii) Bank rate
(iv) Speculative pressure
(v) Activities of financial institutions
(vi) Government policy
(vii) Political development.

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NSE Indices
$\begin{matrix} Index & Current & Previous & % Change S & P CNX Nifty & 3641.1 & 3770.55 & - 3.43 % CNX Nifty Junior & 6458.55 & 6634.85 & - 2.66 % CNX IT & 5100.5 & 5314.05 & - 4.02 % Bank Nifty & 5039.05 & 5251.55 & - 4.05 % CNX 100 & 3519.35 & 3640.35 & - 3.32 % \end{matrix}$

World Markets
$\begin{matrix} Index & Current & Previous & % Change NYSE Cornposite & 8926.88 & 9120.93 & - 2.13 % NASDAQ Composite & 2350.57 & 2402.29 & - 2.15 % DOW Jones IA & 12076 & 12318.6 & - 1.97 % S & P 500 & 1377.95 & 1406.6 & - 2.04 % Nikkei 225 & 16676.9 & 17178.8 & - 2.92 % \end{matrix}$

The above figures are taken from the website of National Stock Exchange of India. They illustrate the movement of NSE stock indices as well as world stock indices on the date indicated.

What factors affect the movement of stock indices? Elaborate on the nature of these factors.

NSE Indices	Word Markets
Index	Current	Prev.	% CHG	Index	Current	Prev.	% Change
S&P CNX Nifty	3641.1	3770.55	-3.43%	NYSE Composite	8926.88	9120.93	-2.13%
CNX Nifty Junior	6458.55	6634.85	-2.66%	NASDAQ Composite	2350.57	2402.29	-2.15%
CNX IT	5100.5	5314.05	-4.02%	DOW Jones I. A.	12076	12318.6	-1.97%
Bank Nifty	5039.05	5251.55	-4.05%	S & P 500	1377.95	1406.6	-2.04%
CNX 100	3519.35	3540.35	-3.32%	Nikkei 225	16676.9	17178.8	-2.92%
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The above figures are taken from the website of national stock exchange of India. They illustrate the movement of NSE stock indices as well as world stock indices on the date indicated.

Questions

1. What do you mean by a stock index? How is it calculated?

2. What conclusions can you draw from the various movements of NSE stock indices?

3. What factors affect the movement of stock indices? Elaborate on the nature of these factors.

4. What relationship do you see between the movement of indices in world markets and NSE indices?

5. Give details of all the indices mentioned above. You can find information on the web or business magazines.

Q. What conclusions can you draw from the various movements of NSE stock indices?

Q. Which factors effects the movement of ocean water?

Which one of these prevent movement of the factors of production across different countries?

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What factors effect the movement of stock indices? Elaborate on the nature of these factors.

The factors which affect the movement of stock indices are:(i) Demand and supply of various securities(ii) Financial position of the company(iii) Bank rate(iv) Speculative pressure(v) Activities of financial institutions(vi) Government policy(vii) Political development.

What factors effect the movement of stock indices?
Elaborate on the nature of these factors.

The factors which affect the movement of stock indices are:
(i) Demand and supply of various securities
(ii) Financial position of the company
(iii) Bank rate
(iv) Speculative pressure
(v) Activities of financial institutions
(vi) Government policy
(vii) Political development.