Petroleum is the blood of the national economy of a modern country and directly affects the development of the national economy. So, does rising oil prices have a big impact on stocks? Good or bad? Related content has been prepared for your reference.
Hong Kong Union Securities Co., Ltd. ( Ganglian Securities on Baidu ) was established in January 2021, with registration number G30108363; Transformed into 36 Securities Financial Services Co., Ltd.,
Will Rising Oil Prices Affect Stocks Much?
The rise in oil prices has a certain impact on stocks, but not very much. The rise in oil prices is only a small part of the factors that affect the rise and fall of stocks.
Stock prices are determined by their value, which is influenced by supply and demand.
The value of stocks generally depends on the company's fundamentals, which are the profitability and growth of the company. Earnings capability refers to the ability to earn per share, and growth refers to the ability to increase earnings per share. For example, when the company's performance is good, the stock will rise, and on the contrary, the stock will fall when the performance is poor.
When the supply of stocks exceeds demand, the stock will rise, and when the supply of stocks exceeds the demand, the stock will fall. When volume increases, the stock goes up, and when volume shrinks, the stock goes down. When the policy is favorable or there is good news, the stock will rise, and on the contrary, the stock will fall when the policy is unfavorable or bad news.
Is rising oil prices good or bad?
Rising oil prices are good for some industries and bad for others.
Positive: Stocks in sectors such as oil mining, oil refining, and oil services will also drive up the prices of sectors such as gas, coal, gold, new energy, and transportation.
The impact of rising oil prices on the oil mining and processing industry is the most obvious. It can affect these industries' oil mining and processing, and can obtain higher income from it. The increase in income promotes the rise of the industry's stocks. At the same time, after the oil price rises, people may choose trams or new energy vehicles to travel, which is good for industries such as new energy.
Bad news: basic raw material production industry, consumer industry, automobile manufacturing industry.
The rise in oil prices will lead to an increase in the production costs of some basic raw material industries, such as some machines that need to use oil, or some equipment powered by oil. At the same time, consumers need to pay more to buy oil, which will lead to a short-term reduction in related consumption, which will have a certain negative impact on some retailers and the automobile manufacturing industry.
The above is the knowledge about "does rising oil prices have a big impact on stocks? Good or bad?"