{"id":6539,"date":"2022-01-24T16:33:09","date_gmt":"2022-01-24T11:03:09","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=6539"},"modified":"2022-05-24T11:05:18","modified_gmt":"2022-05-24T05:35:18","slug":"how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/","title":{"rendered":"How To Benefit From the Fluctuations in Sensex and Nifty: Stock Market Trends"},"content":{"rendered":"\n<p>If you\u2019re an investor, one of your greatest joys would be seeing stock prices rise. Depending on your return expectations and risk appetite, you can make decent profits during a healthy market uptrend. However, <a href=\"https:\/\/www.tickertape.in\/blog\/stock-market-outlook-for-2022\/?utm_source=blog&amp;utm_medium=article\">stock market<\/a> trends are not always upward facing. New investors find it baffling that stock prices change every second and have a hard time aligning their portfolios.&nbsp;<\/p>\n\n\n\n<p>Understanding what moves and dictates the price of stocks is basic investment knowledge. It helps investors develop <a href=\"https:\/\/www.tickertape.in\/blog\/risk-diversification\/?utm_source=blog&amp;utm_medium=article\">portfolios<\/a>, <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> wisely, and make profits in the long run.<\/p>\n\n\n\n<p>This article will explore what causes stock prices to fluctuate and how to tap these swings to your benefit.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#What-causes-stock-prices-to-fluctuate\" title=\"What causes stock prices to fluctuate?\">What causes stock prices to fluctuate?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#Demand-and-supply\" title=\"Demand and supply\">Demand and supply<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#Company-earnings\" title=\"Company earnings\">Company earnings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#Company-news\" title=\"Company news\">Company news<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#Stock-mispricing\" title=\"Stock mispricing\">Stock mispricing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#Economic-factors\" title=\"Economic factors\">Economic factors<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#How-to-benefit-from-fluctuations\" title=\"How to benefit from fluctuations?\">How to benefit from fluctuations?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#52-week-high-vs-52-week-low-A-lesson-for-investors\" title=\"52-week high vs 52-week low: A lesson for investors\">52-week high vs 52-week low: A lesson for investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/how-to-benefit-from-the-fluctuations-in-sensex-and-nifty-stock-market-trends\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"what\"><span class=\"ez-toc-section\" id=\"What-causes-stock-prices-to-fluctuate\"><\/span>What causes stock prices to fluctuate?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/national-stock-exchange\/\">NSE<\/a> <a href=\"https:\/\/www.tickertape.in\/indices\/nifty-index-.NSEI?utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Nifty<\/a> and <a href=\"https:\/\/www.tickertape.in\/stocks\/bse-BSEL?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">BSE<\/a> <a href=\"https:\/\/www.tickertape.in\/blog\/sensex-companies\/\">Sensex<\/a> are two common indicators in the context of the <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-shares\/\">stock market<\/a> <a href=\"https:\/\/www.tickertape.in\/blog\/stock-market-index\/\">index<\/a>. So let\u2019s look at some factors which drive the stock market index up or down:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Demand-and-supply\"><\/span>Demand and supply<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The price of a particular stock goes up if its demand increases for some reason. Likewise, stocks with low demand attract fewer investors, causing a price drop. For example, stock prices of air conditioners companies shot up last year with the government banning the import of the same with refrigerants from China. This was done to promote domestic manufacturing in the country.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Company-earnings\"><\/span>Company earnings<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A company making substantial profits with revenues exceeding quarterly projects will attract more investors. The price of stocks of such a company will usually spike. But if a company does not meet its projections, its stock prices will most likely drop.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Company-news\"><\/span>Company news<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Company-related positive or negative news affects its stock price. For example, a stock price rise can result from acquiring another company, diversifying into a new market, or an interest hike. Likewise, scams, lay-offs, shut-downs, etc., cause investors to sell stocks, driving down prices. For example, <a href=\"https:\/\/www.tickertape.in\/stocks\/bharti-airtel-BRTI?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Bharti Airtel<\/a>\u2019s stock price rose to new heights with its announcement of venturing into 5G.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Stock-mispricing\"><\/span>Stock mispricing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Overvalued stock prices are a hallmark of speculative bubbles that eventually pop, driving prices low as rapidly as their rise. Similarly, investors dump stocks out of fear that a company may be doomed after a downturn, resulting in undervalued stock prices.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Economic-factors\"><\/span>Economic factors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Finally, macroeconomic and microeconomic factors play their part in fluctuating stock prices. Political unrest, natural\/anthropogenic disasters, war, civil unrest, <a href=\"https:\/\/www.tickertape.in\/blog\/unemployment-the-deadly-cost-of-covid-19\/\">unemployment<\/a>, inflation, availability of workforce, etc., all impact stock prices. <a href=\"https:\/\/www.tickertape.in\/blog\/manufacturing-sector-recovery-from-covid-19\/?utm_source=blog&amp;utm_medium=article\">Covid-19<\/a> pandemic can be a prime example here. It has kept the markets on their toes with constant highs and lows.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how\"><span class=\"ez-toc-section\" id=\"How-to-benefit-from-fluctuations\"><\/span>How to benefit from fluctuations?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Most often, mispricing of well-established, <a href=\"https:\/\/www.tickertape.in\/stocks\/collections\/largecap-stocks?utm_source=blog&amp;utm_medium=article\">large-cap<\/a> companies is because of temporary sensations arising from scandals, legal issues, shutdowns, etc. These factors bring down stock prices, but only temporarily. Likewise, bear markets or general economic pessimism often beat down companies with no significant shortcomings. But, again, it\u2019s only temporary.<\/p>\n\n\n\n<p>In other words, it is primarily the judgement of market participants that shifts the prices. When a large bunch of investors perceive a bright future for a company, they\u2019d be more interested in buying stocks, thereby causing prices to rise. Similarly, the market will see a downtrend when the participants don\u2019t feel great about future prospects.<\/p>\n\n\n\n<p>But here\u2019s the trick: as an investor, it is up to you whether you choose to follow the herd or simply wait. Temporary setbacks can cause a company\u2019s stock prices to go down, but it doesn\u2019t mean that the company is gone for good. Businesses recover, and that\u2019s the most important thing you should remember as an investor.&nbsp;<\/p>\n\n\n\n<p>Fluctuating stock prices are a market trait. However, as an insightful investor, you can benefit from dynamic market trends by not letting short-term <a href=\"https:\/\/www.tickertape.in\/blog\/volatility\/?utm_source=blog&amp;utm_medium=article\">volatility<\/a> and losses cloud your judgement. Instead, wait for the prices to rise after a downtrend and sell when you have the chance of making substantial profits. Likewise, you can hang fire till the stock you want to buy is mispriced on the lower side. The key is to wait for the ripest opportunity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"52\"><span class=\"ez-toc-section\" id=\"52-week-high-vs-52-week-low-A-lesson-for-investors\"><\/span>52-week high vs 52-week low: A lesson for investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s look at the 52-week highs and lows of some BSE companies to understand the buy-low-and-sell-high mantra:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Company<\/strong><\/td><td><strong>Current Market Cap (Cr.)<\/strong><\/td><td><strong>Current Price (As of 31 December 2021)<\/strong><\/td><td><strong>52-week Low<\/strong><\/td><td><strong>52-week High<\/strong><\/td><td><strong>Change (%)<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/www.tickertape.in\/stocks\/reliance-industries-RELI?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Reliance Industries Ltd<\/a><\/td><td>Rs. 16,01,382.07<\/td><td>Rs. 2,368.15<\/td><td>Rs. 1,830.00<\/td><td>Rs. 2,750.00<\/td><td>50.3%<\/td><\/tr><tr><td><a href=\"https:\/\/www.tickertape.in\/stocks\/tata-consultancy-services-TCS?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Tata Consultancy Services Ltd<\/a><\/td><td>Rs. 13,82,280.01<\/td><td>Rs. 3,736.85<\/td><td>Rs. 2,701.00<\/td><td>Rs. 3,990.00<\/td><td>47.7%<\/td><\/tr><tr><td><a href=\"https:\/\/www.tickertape.in\/stocks\/hdfc-bank-HDBK?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">HDFC Bank Ltd<\/a><\/td><td>Rs. 8,20,164.27<\/td><td>Rs. 1,479.80<\/td><td>Rs. 1,342.00<\/td><td>Rs. 1,724.30<\/td><td>28.5%<\/td><\/tr><tr><td><a href=\"https:\/\/www.tickertape.in\/stocks\/infosys-INFY?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Infosys Ltd<\/a><\/td><td>Rs. 7,94,714.60<\/td><td>Rs. 1,889.65<\/td><td>Rs. 1,230.00<\/td><td>Rs. 1,913.00<\/td><td>55.5%<\/td><\/tr><tr><td><a href=\"https:\/\/www.tickertape.in\/stocks\/hindustan-unilever-HLL?&amp;utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Hindustan Unilever Ltd<\/a><\/td><td>Rs. 5,54,444.80<\/td><td>Rs. 2,359.75<\/td><td>Rs. 2,104.25<\/td><td>Rs. 2,859.10<\/td><td>35.8%<\/td><\/tr><\/tbody><\/table><figcaption>Source: <a href=\"https:\/\/www.bseindia.com\/markets\/equity\/eqreports\/topmarketcapitalization.aspx\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">BSE India<\/a><\/figcaption><\/figure>\n\n\n\n<p>As evident from the table, the difference between the 52-week high and low is significant for all of these companies. However, these are established firms with negligible chances of the business\u2019s worth overturning within a few months. <\/p>\n\n\n\n<p>The point is this: it is solely the <a href=\"https:\/\/www.tickertape.in\/blog\/stock-market-participants\/?utm_source=blog&amp;utm_medium=article\">market participants<\/a>\u2019 sentiments that cause the fluctuations and lead to mispricing. The key is to play on the market sentiments and spot the right opportunity to trade and invest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Several factors contribute to the ever-fluctuating price of stocks. It is a market characteristic that investors need to get used to and take advantage of as much as possible. If you\u2019re a risk-averse investor looking out for long-term investment opportunities, temporary volatilities should not concern you largely. Companies that have survived the wraths of shifting market trends in the past have the potential to do so again.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wondering when to sit tight and when to go aggressive when stock market fluctuates? Click here to read this guide on sensex and nifty fluctuation and take your decisions wisely!<\/p>\n","protected":false},"author":45,"featured_media":6545,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[9,1749],"tags":[252,44],"acf":[],"modified_by":"Anjali Chourasiya","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/01\/07-1.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/6539"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/45"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=6539"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/6539\/revisions"}],"predecessor-version":[{"id":8621,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/6539\/revisions\/8621"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/6545"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=6539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=6539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=6539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}