What causes stock prices to rise and fall?

The rise and fall of stock prices in the capital market is a very common thing. This is because stocks are volatile, they can go up or down like the price of goods or commodities in the market.

Then, 

what causes the rise and fall of a company's stock price?

The rise and fall of stock prices is something that is common because it is driven by the forces of supply and demand. If the demand is high then the price will go up, otherwise if the supply is high the price will go down.

1. Fundamental conditions of the company

The fundamental condition of the company can be seen through various company actions such as acquisitions, mergers, and divestments. You can also see this condition through the company's financial statements. The better the company's financial statements, the demand for these shares will increase.

Vice versa, if the financial statements are bad, the demand for the company's shares will also decrease. In other words, a company with good fundamentals will have a skyrocketing share price, while a company with poor fundamentals will have its share price plummeting.

2. Fluctuations in the rupiah exchange rate against foreign currencies

The strength and weakness of the exchange rate or the exchange rate of the rupiah against foreign currencies can also be the cause of the rise and fall of stock prices. This can have positive or negative consequences for certain companies, especially those with foreign currency debt burdens.

Shares of companies that have a foreign currency burden will greatly affect the weakening of the rupiah exchange rate. This is because it makes operating costs soar and automatically causes a decrease in the price of the shares offered.

The weakening of the rupiah exchange rate against the US dollar also often makes stock prices in the Jakarta Composite Index (JCI) weaken.

3. Government policy

Government policies, whether they have been realized or are still being discussed, can affect stock prices. Some examples of policies that can cause stock price volatility are exports and imports, companies, debt, foreign investment (PMA), and so on.

4. Panic

Panic in an exchange or stock can be triggered by certain news circulating in the community. It can then make investors sell their shares. This is known as the panic selling phenomenon, which means that investors will sell their red shares under any conditions before the price falls further. The action is triggered by emotion and fear, not a rational analysis.

Therefore, you should not sell shares when in a state of panic. You can analyze the stock that you want to sell through its fundamentals whether it can still be maintained or should it be sold.

5. Market manipulation

Triggers up and down stock prices can also be caused by market manipulation. Market manipulation is usually carried out by experienced and capitalized investors. The trick is to use the mass media to manipulate certain conditions for their purposes, either to increase or decrease stock prices. In the world of capital markets, this is known as rumours. However, these rumors often do not last long and only last for a moment.