Financial Market Analysis

Financial Market Analysis deals with the performance of a particular financial market(s). The performance of a financial market depends upon the performance of the total number of securities that are traded in that market. On a given day when the market closes with the prices of most of its securities on the higher side, then it could be said to have performed well. This is reflected in a market indicator called Index which tracks the performance of some of the more popular and steady securities that are traded in that particular financial market.

Some of the most famous securities market indexes of the world are:

• Footsie – London financial market
• Dow Jones – New York financial market
• Hang Seng – Hong Kong financial market
• BSE Sensex – Mumbai financial market
• Nikkei – Tokyo financial market
• Nifty – Indian national financial market

The financial market index has become particularly important in today’s market economy, which is integrating very fast on a global scale. Traders do not confine trading in securities to just one or two markets in the country of their origin but invest in a large number of markets across the globe. With more and more investment companies developing global dimensions financial markets around the world are integrating on a scale never imagined before.

As a result, analysis of the financial markets has become one of the main activities covering a very large number of factors both within the market and outside it. For instance, when the government of the country where the market is located, announces a new policy measure aimed at deregulating a particularly stifling part of an industry segment, it may have a positive impact on the financial market. Financial market analysts cannot anticipate such factors and therefore the impact of these factors do not come under the main purview of financial market analysis. However, most analysts do set aside some space for the impact of extraneous factors on the market and they do so in equal measure for both positive as well as negative factors.

Financial market analysis has become a highly specialized activity confined to select groups of experts known as technical analysts. In most cases they are professionally trained in financial analysis and are reasonably familiar with the tools used to analyze a particular market. In certain other cases they are economists or veteran investors with a special interest in financial market analysis and market economics. The number of factors that directly or indirectly impact the financial markets are increasing rapidly with more analysts digging deeper into the circumstances that influence financial market behavior. On the other hand, the integration of information technology in market analysis is increasingly meeting the challenge posed by the complexities of financial market analysis.

Some of the most important types of analysis affecting financial markets are:

• Fundamental Analysis
• Securities Market Analysis
• Securities Market Technical Analysis
• Index Momentum Analysis
• Securities Momentum Analysis
• Securities Chart Analysis
• Market Analysis
• Market Trend Indicators