When you buy a stock, you’re not just buying a piece of paper—you’re buying a claim on a company’s future. But how stocks are priced, the process by which the market assigns a value to a company’s shares based on supply, demand, and underlying financial health. It’s not random, and it’s not just about what the company says it’s worth. The price you see on your screen is the result of thousands of trades happening every second, driven by real people making decisions based on facts, rumors, fear, and hope.
Stock valuation, the method of estimating a company’s true worth using earnings, assets, growth potential, and industry trends is the foundation. If a company earns ₹10 crore a year and has 1 crore shares, each share earns ₹10—that’s the basic math. But the market doesn’t stop there. Investors look ahead: Will profits grow? Is the industry booming? Are interest rates falling? All of this gets baked into the price. Meanwhile, stock market India, the ecosystem of exchanges like NSE and BSE where buyers and sellers meet to trade shares acts like a giant auction house. If more people want to buy a stock than sell it, the price goes up. If everyone’s trying to sell, it drops—even if the company’s numbers haven’t changed.
That’s why a stock can jump 10% after a CEO says, "We’re expanding," even if no details are given. Or why a stock can crash after a single negative news headline. Stock trading, the act of buying and selling shares in real time, often influenced by short-term sentiment and technical patterns adds noise, but the long-term price still ties back to fundamentals. In India, where retail investors make up over 90% of the market, emotions play an even bigger role. A stock tied to a popular local brand, or one that’s been in the news for a Kumbh Mela project in Prayagraj, might get a temporary boost from hype.
What you’re seeing isn’t magic. It’s a mix of hard data, human behavior, and market mechanics. Some stocks are priced based on earnings. Others on future potential. A few, especially small ones, are priced on whispers. The key is knowing which driver matters most for the stock you’re watching. Below, you’ll find real examples from Indian markets—how dividend dates affect price, why ELSS funds move with market trends, how trading holidays delay settlements, and what really happens when a company reports profits. These aren’t abstract theories. They’re the same forces shaping your portfolio right now.
Learn how stock prices in India are determined by supply and demand, company performance, market sentiment, and macroeconomic factors like interest rates and foreign investment. Understand what really moves shares on the NSE and BSE.
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