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Factors That Shape The Market


Factor #1 – Government The Government has much control over the free markets. Both the Fiscal and Monetary Policy can affect the marketplace. The growth of a country can be sped up or slowed down by the Government when it influences the interest rates. When it alters the interest rates it can effectively control the amount of investment coming inside and going outside the country.


Factor #2 – Export & Import Export and Import play a vital role for a country's economy. When money is leaving the country than is coming in it would make a country economically weak. What this means is that countries which import more than they export will find its financial reserves going down.


Factor #3 – Speculation Along with speculation, economic expectation is also a part of the factors that shape the market. Policy makers attempt to determine where the country and the markets are headed in the future and act accordingly. There are many sentiment indicators that throw up data and those are analyzed by the policy makers to create the basis of future pricing rates.


Factor #4 – Supply & Demand One of the biggest factors, supply and demand creates a pushpull kind of motion on the prices in the market. Supply is inversely proportional to the price factor while demand is directly proportional. When there is more supply prices will fall. But when there is more demand the prices will invariably go up.


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Factors that Help Shape the Market