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How stock market is affected by the inflation?


The stock market in India is affected by various factors such as the interest rates, political events, company management decisions and so on. Of these, inflation is one of the prominent factors that have a significant bearing on the stock market. Now a question crops up here is how inflation affects stock market? Well, the answer is pretty much straightforward.

If there is a high rate of inflation in the country, then it is quite obvious that the raw materials, which are available to the companies for the purpose of manufacturing the products, will be available on the higher prices. In such a situation, the company does not have any other option, but to increase the prices of the products. If the product prices are on the higher side, then there may be the situation that the demand for the products may decrease. If the demand is low, then the share prices of the company may dip. If such is a case with most of the companies, then it may ultimately affect the stock market.

If you have invested in the stock market, then during the times of the rising inflation, it is highly important to keep a track of the share prices instantly. Now, the main problem here is that it is a difficult task to take out the laptop from your bag and check out the prices. The situation may become all the more worse if you are in a crowded place where taking out the laptop may become a challenging task. Nowadays, with the improvement in the technology, it has now become a hassle free task to track the prices.
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