What factors can affect the share prices on the share market?

The prices of individual shares on the share market are subjected to a wide range of factors that can affect the prices. The market and its performance are tracked using a number of measures, known as indexes.

These indexes such as the All Ordinaries – which tracks the top 500 companies listed on the ASX – provide a gauge on how the overall performance of markets, or particular segments – such as the emerging company index (XEC).

The prices on the share market can rise and fall for a wide range of reasons, outlined below:

• Company-specific – such as profit announcements, corporate restructures or new opportunities
• Market-specific – such as the announcement of the government cracking down on sugar in soft drinks and its effect on Coca-Cola Amatil’s (CCA) core market of carbonated soft drinks
• Industry-specific – The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry
• Macro-economic - such as the Chinese-US trade war

All of these specific reasons or changes can positively or negatively take their toll on the share price on the share market.

Other factors include demand & supply (how much is available to buy and how many people want to buy a particular share), interest rates (availability to money), election cycles, geopolitical risks, even activism investing, which is often led by large hedge funds in taking a position against a company they see as behaving badly to crush their share price.