What factors influence financial market performance?

Several factors can influence the performance of financial markets. Here are some of the key factors that can affect financial market performance in India:

1. Economic growth: Economic growth can have a significant impact on financial market performance. When the economy is growing, companies are likely to perform well, and this can drive up stock prices. Similarly, when the economy is in recession, stock prices tend to decline.

2. Interest rates: Changes in interest rates can impact financial market performance. When interest rates are low, investors tend to invest more in equities, which can drive up stock prices. When interest rates rise, investors may move their money into fixedincome securities, such as bonds, which can cause stock prices to decline.

3. Inflation: Inflation can also affect financial market performance. High inflation can reduce consumer spending, which can lead to lower corporate profits and lower stock prices. Low inflation can boost consumer spending and increase corporate profits, which can drive up stock prices.

4. Government policies: Government policies, such as tax policies, trade policies, and regulatory policies, can impact financial market performance. Changes in tax policies, for example, can impact corporate profits, which can in turn affect stock prices.

5. Global events: Global events, such as wars, natural disasters, and political upheavals, can also impact financial market performance. These events can cause investors to become nervous, which can lead to selling pressure and lower stock prices.