In the world of finance and the (sometimes) cutthroat world of investing, you would be surprised at some of the strange factors that make an impact on the share market in Australia today. A lot of people are unaware of the seismic impact and interconnectivity certain industries have with each other, and when you look at the share market in Australia today, you’ll find that all aspects of our day-to-day existences are covered in some way in some shape or form.
As such, this can lead people to have a variety of theories and possible ways of thinking when it comes to noting the factors that can impede or exceed their expectations on a stock investment. The share market in Australia today is coming back strongly since the re-opening of businesses and international travel, and a renewed population that is looking to see what they can do as we come out the other side.
There are four factors that primarily impact the share market in Australia today – while the true price is reflective of demand – the demand itself can be iterated and broken down into 4 primary sub-categories that each have their eccentricities and impacts. This article will explore the 4 main factors that have a hand in the demand of the share market in Australia today.
1. The Economy
Economic factors have a massive repercussion on the share market in Australia today for a variety of trickle-down reasons that you may not have connected before. For instance, the simple concept of interest rates. If interest rates are higher than usual, people find less reason to purchase things needlessly, this can impact a majority of the industries that find themselves on the ASX which in turn, could reflect poorly.
However, in the case of the government easing or reducing interest rates to stimulate growth or spending, you’ll likely see it reflected on the share market in Australia today. Currency exchanges also have a slight impact as well, with the value of the Aussie dollar playing a major role in determining spending and price indexes.
2. Company Earnings
Naturally, the company’s projected or actual earnings for the quarter or year play a huge role in determining viability and pricing. Companies that are trading on the ASX will usually report earnings ahead of time. Investors have a habit of punishing the shorter earning companies quite matter-of-factly – the price and value can drop dramatically and without remorse if there is a noticeable drop in performance or meeting expectations.
On the other side of the coin, you can guess that the share market in Australia today can be impacted positively by companies exceeding expectations in their earnings.
What a lot of people don’t realise is that the share market in Australia today is not quite based on the exact current valuation, but instead, the potential trajectory in the future. Expectations in the revenues, even political shifts, can be factorial in price fluctuations. Furthermore, companies will typically release their projections for analysts. These analysts then publish a range of projected price indexes, and possible through lines which can have an impact.
4. Emotional Compromission
Yes, emotions can play a part in the share market in Australia today, tomorrow, and forevermore. It is a time-honoured notion that greed, fear, and confidence can have a zealous impact on the share market in Australia today. It could be as simple as a rumor circulating about slowdowns or increased sales. Most experts leave these fluctuations to the breeze as long as the fundamental structure of businesses remain intact, it is a short but noticeable fluctuation caused by human emotion.