The US stock market plummeted, and so did the FTSE A50 index. Will it affect the big A shares?

The main reason of stock price fluctuation is the change of stock supply and demand. The factors that change the relationship between stock supply and demand mainly come from the following aspects:

1, political factors

Political factors refer to political activities at home and abroad that can affect the changes of stock prices and the formulation and changes of government policies, measures and decrees related to the development of the stock market.

(1) War. The impact of the war on the stock market is enormous. The impact of the war on the stock price depends on the nature and result of the war and the economic impact on the world or local areas. The outcome of the war will also affect the confidence of investors, lead to the rise or fall of stock prices, and make the whole stock market fluctuate.

2 political power. Whether the political situation is stable, the handover or transition of political power, the replacement of leaders, the behavior of the government and the stability of society will all affect the public's investment confidence. The confidence of investors is an important factor in determining the stock price.

(3) Government policies. The government's socio-economic development planning and economic policies, especially the formulation and changes of fiscal policy, monetary policy, industrial development policy, trade policy and stock market development policy, will affect the changes of stock prices. The introduction of some laws and regulations on stock market development will also affect the changes of stock prices.

2. Economic factors

① Economic growth and economic boom cycle. The growth of national income reflects the comprehensive level of economic development and growth in a certain period. Whether the national income is expected to increase or decrease, as well as the growth rate of national income, are important factors affecting the rise and fall of stock prices, and the economic boom cycle affects the periodic fluctuation of stock prices.

2 price. There is no direct relationship between price and share price. Generally speaking, rising prices will make the stock price have an upward trend. This is because in the period of inflation, because the interest rate of bank deposits is often lower than the inflation rate, for investors who hold cash, deposits are tantamount to currency depreciation, which will inevitably shift their savings to other objects that can preserve and increase their value. Therefore, the number of investors buying stocks will increase accordingly. Nevertheless, the relationship between price rise and stock price rise is not very obvious. In the period of inflation, the profits of some listed companies will increase, but some listed companies seriously affected by inflation will lose profits because of the rapid increase in costs, resulting in a decline in profits or losses, and a decline in stock prices; In addition, during the period of inflation, the government will encourage savings by raising interest rates and setting a premium rate, which will affect the rise of stock prices. In this way, the price increase has no obvious influence on the stock price in the short term. However, in any case, the rise in prices will make the stock price show an upward trend.

3. Financial factors

1 interest rate. Interest rates are closely related to stock prices. Generally speaking, interest rates go up, stock prices go down, interest rates go down and stock prices go up. The interest rate is inversely proportional to the stock price.

② exchange rate. If the exchange rate rises, that is, the domestic currency appreciates, which is not conducive to exports, but to imports. Because it is more difficult to export, it is not good for export-oriented enterprises, and the stock price will fall. If the exchange rate falls, that is, the domestic currency depreciates, this is unfavorable.

Tips: The above contents are for reference only. Investment is risky, so be cautious when entering the market.

Response time: 2021-11-17. Please refer to the latest business changes announced by Ping An Bank in official website.