Stock Market · Introduction to Stock Markets

How stock prices actually move

A stock's price is just the last price someone paid for it. Not the company's true value. Not what the CEO thinks. Just supply and demand at that microsecond.

The mechanism

More buyers than sellers → price goes up.

More sellers than buyers → price goes down.

Every second, thousands of orders hit NSE's matching engine. It pairs buyers with sellers. That pairing creates the price.

What drives buy and sell decisions

• Earnings. Quarterly results. Beat expectations → stock rallies. Miss → stock falls.
• News. New contract, product launch, government policy. Positive = buyers rush in.
• Macro events. RBI rate decisions, US Fed meetings, oil prices, global crises.
• Sentiment. Irrational but real. A trending stock can rally 30% on no fundamental news.

> In the short run, prices are a voting machine, they reflect sentiment. In the long run, they're a weighing machine, they reflect actual business results. Short-term traders ride the voting machine. Long-term investors wait for the weighing machine.

What you can't control

A company can do everything right and still drop because of FII outflows or global panic. This is why diversification exists. One company's bad day shouldn't ruin your year.

3 cr+Orders processed by NSE every single day

0.07msTime NSE's system takes to match one order

Takeaway. Price is pure supply and demand. Earnings, news, and macro events shift who wants to buy or sell.