News make views, and views set the moods. Investors react quickly on news (unfortunately on rumors too), and if news is appropriate then big investors also join the crowd. There are various kind of news, and factors that effect investor's mood, primarily of them are listed below:
1. Corporate News
i) Merger and Demerger News
If a company is going under merger, it is considered a good news in market and the stock price of related share goes up. Moreover, if this merger is associated with a foreign company, investors weigh it more better and relatively share prices could be more high.
In the same manner, a demerger is not a good news and always shows negative sign on the stock chart.
If the company going under Merger/Demerger news is listed in Sensex/Nifty50 and weigh quite high value, then it strongly impacts the all Indian stock markets.
ii) Acquisition or takeover announcements
If a company X is acquiring Y, then share prices of X will definitely goes up. Investors take it in very positive manner, it shows that company has power, resources and finance to acquire and is becoming strong day by day. So a good image is traced with acquisition. If Y is a foreign company, prospects are more good. Investors should keep eyes on such news. If Y is a Indian company, and is listed in BSE or NSE, it may slightly rise and is never being suggested to invest in after the news is in public.
iii) Expansion plans
Like acquisition it also traces a good image of company and stock prices are likely to gup for same reasons.
iv) Layoff and hiring news
Hiring news shows that company has good projects to work on and more such projects are on the way, that's why investor take it in positive manner and reacts to market in the same way. Sometimes, companies play with this sentiment of investors too and spread rumours with higher figure than it's supposed intake.
Layoffs clearly displays weak fundamentals of company and bring decline in the stock price. Layoffs belong to sensitive sentiments of investors as sometimes it is also taken in good sense, since company's net profit will rise as companies resources will be less utilized and now it won't be giving high and meaningless salaries.
v) Quarter results
Stock traders keenly waits for them and there are certain figures in these results, which holds the interest of traders. Like net profit, revenue and sales figure. If company has performed very well, there are chances of dividend and bonus declarations, which bring a positive wave in the market. Quarterly results are considered directly proportional to its stock prices but good figures is not all that matters, so watch for few months that how investors and market reacts to quarter results before you actually rely upon them!
vi) Fundamental News
The foundational news, that news related to business models, future prospects of the company, change in management, change in process, land acquisition, projects news etc. They reflects the strong prospects of company in near and long term and are vital for long term investments in a stock.
2. Political News
i) Regional News
Regional news affect the stock prices of companies having their production, manufacturing or other key functional areas in those regions. Like a news about UP government, could affect sugar companies like Balrampur Chini, Triveni sugar etc.
ii) Election News
It is not considered as good news, for many reasons. Elections cause heavy cost on government which is sure to be covered later in budget. Reforming relations with new state and national government. Heavy selling by ministers and politicians to cover the election campaign and ticket costs. There are such many other crappy factors to fall the market.
iii) Inflation Rate
Inflation rate is declared by Indian government every Friday at 12.00PM and shows the wholesale prices of consumer goods. If compared to last week inflation rate, this time is lowered then stock prices go up else they fall down.
iv) Change in CRR
CRR is Cash Reserve Ratio, it is the minimum percentage of a bank's total deposits to be reserved with RBI in CASH. Decline in CRR brings more liquidity(money inflow) in the banks and so taken in positive mood always. Bank sector stocks are likely to go high more in comparison to other stocks.
v) Budget news
It totally depends upon the budget as there are so many factors to look on in a budget. Like import/export duty, computer prices, custom duty, excise duty, freight charges(Railway budget) etc., there are so many players and they affect sensex in together manner. Generally, corporate investors also don't take it easily and 90% throughout the history, market fell after the budget.
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