Australian Stock Exchange – ASX Share Prices

The Australian Stock Exchange or Australian Securities Exchange is called the ASX. It merged with Sydney Futures Exchange in 2006. The index in the stock market is calculated by considering the share prices of top 200 shares. These shares belong to top companies who own a major share in the market. So any change in their share prices can affect the whole economy to a great extent.
The price of shares on the Australian stock exchange, or ASX Share Prices here, changes frequently due to many reasons. This can be related with the economic situation inside the country as well as outside of its purview. When the Australian economy is stronger then the share prices tend to rise and vice versa. An economy is said to be stronger when more investment is happening there and employment and income level of people are in a good condition. It is followed by a great demand for products produced. So the investors will take more initiative to invest more and more in the business sector.

Australian Stock Exchange Dealings

There are many factors deciding the ASX share prices on the Australian stock exchange .It can either be one or many things at a time. However, generally we can classify them as demand and supply conditions of stocks. When greater the demand for a particular stock greater will be its price and vice versa. The relationship is negative between the supply of a stock and its price. When there is greater number of a particular stock available, then its price tend to fall. We can consider many factors affecting the demand and supply conditions. It can be environmental factors like drought, Political factors like political conflicts among various political parties, economic factors like change in interest rate, and further the company’s performance also affects the price of the stock. On the Australian stock exchange as in others, the company performance means whether it is making profits or loss.

Australian Stock Exchange price fluctuations

Among the various reasons, the key factor determining the share price on the Australian Stock Exchange or any stock exchange is the profit margin of the company. An investor will buy only the stocks of profit making companies, unless perhaps they are ‘shorting’ which is a subject for another article!

Interest rates can have great impact on share prices. Buyers markets on the Australian stock exchange generally relate to lower interest rates and sellers markets relate to higher interest rates. A lower interest rate implies a reduced demand for capital investment, which would result in lower share prices. Share prices on the Australian Stock exchange changes from the moment the trade begins at the morning. Every year when the Government presents its budget, the annual financial statement, we can see a major change in the share prices. Suppose Government decides to increase the tax for a particular commodity, then its price tend to increase, then its stock price seems to show a downward trend. The reason is that the capital investors are losing hope in the market.

Factors affecting the Australian Stock Exchange

In spite of all the factors affecting the Australian Stock Exchange, people still invest in stocks by expecting more profits. In times past, property was always the place in which to place your hard earned cash, or indeed tospeculate on an accumulate some profits. With the recent downturn in the property markets globally though (Australia avoiding the worst of the slump so far ) the stock markets of the world including the Australian Stock Exchange, have taken on a new sheen as investors desperately look for other ways to invest and grow their financial positions.
Although the higher risk derivatives market is tempting for some, most would opt for the less risky options especially in such a delicate market like we are witnessing today. Normally people who do not want to take much risk tend to invest in Government stocks which guarantee a minimum amount of dividend irrespective of the market condition. He can either end in profit or loss in the case of private companies stocks. But, by considering the company’s balance sheet and the present social, Political and economic situation an investor looking at the Australian Stock Exchange will be able to take a good decision based on solid information.

LISTED UNDER:AUSTRALIAN STOCK EXCHANGE