Stock market or the Share market is the place where the buyer or the seller buys and sells stocks (also known as shares) of their and other companies listed in stock exchange. A Stock Market is directly linked to the finance and economic structure of the nation hence a Stock market influences the economy of the country.
Traders do business by trading in the shares of different companies which keep fluctuating every minute hence they need to follow best share market news in Australia very closely. They study the pattern of the share of any particular company before investing money on it as this will lead to a loss or profit of the investment made. There are people hired just to study the stock growth or fall and predict the future of any company.
A lot of money is involved in this business, the buyer and seller agrees on the price for the ownership of the stock of a particular company. Such huge money transactions, which basically happens mostly in the virtual world, needs a lot of research work and for this the traders follow the share market news very religiously. Big companies have their stocks listed in the exchanges across the world.
A few words about the importance of a stock market
• This allows the businessmen to publicly trade and raise finance for expansion by selling the ownership of the company. It’s a better option of investment than on property and other assets. Companies can easily raise finance by selling their shares.
• The Stock market is the reflection of the country’s economy hence higher investment in the stock means better economic conditions of the country. But fluctuations in the stock exchange may affect the common household too so the government have to intervene and keep a check through national banks.
• The stock exchange is a place where all the deals take place buying and selling and the payment hence the there is no chance of default.
• Earlier only a fraction of population was involved in share trading whereas today more and more people are participating in the investment in shares directly or through mutual funds.
• When there is an extreme drop in the share prices the market is said to be crashed though no fixed reasons has been concluded for such phenomena. Normally, it happens when a country is going through financial crunch or a war. The recent global Share market crash is an example that there is no particular reason to affect the market.
Though there is market prediction but it’s not always accurate as it’s just a prediction keeping in mind the current performance of any company. To know a country’s financial condition, its stock market is followed and it won’t be wrong to call the stock market to be the spine of the financial system of any given nation.