What moves the stock price? Who moved the index?
The Singapore stocks market benchmark index, Straits Times Index, STI dropped 54.24 points becuase of new released on property stamp duty policy? The headline news on December 8, 2011 Straits Times newspaper, the Government unveiled a set of unprecedented stamp duty taxes measure on December 7 night to curb the swelling Singapore property market has caused some effect on the property stocks. This is the fifth round of property cooling measures since September 2009.
Across the Singapore Stocks Exchange real estate sector, such as City Development, CapitaLand, and Keppel Land the prices were all fallen.
Some experts said prices behave independently of economic and financial releases, political decisions, and opinions of the most-followed market experts.
There are many reasons that move the price. One thing for sure is the supply and demand equation. The price moves higher when there are strong demands and the price drop lower when there aren’t any buyer around or no interest.
The buyers are not willing to buy when they think the price is too expensive, and the buyers will only buy again when they think the price is cheap.
If you monitor the market long enough and traded often, you’ll come to realize something amazing: The news is not driving the markets’ larger trends but it definitely will create ripples depending how big the news was.
Technical Analysis Perspective
As found in Wall Street classic Elliott Wave Principle Page 21:
“…the market has a law of its own. It is not propelled by the external causality to which one becomes accustomed in the everyday experiences of life. The path of prices is not a product of news…The market’s progression unfolds in waves. Waves are patterns of directional movement.”
Waves = Ripples
Straits Times Index Daily Chart for illustration
