Investing in a Company's Stock? Here's Why You Need to Study its Parent First

Rithika had invested Rs 1 lakh in the shares of a telecom major. After seeming to do well for about a year, the share price started plummeting alarmingly. Within no time, Rithika’s investment value dropped to Rs 60,000. She could not understand why the stock was underperforming since the telecom company was doing well financially and was profitable.

 

What Rithika didn’t know was that besides company fundamentals and market sentiment, there could be other factors at play. Let us look at some of these extraneous factors that influence share price movement despite no apparent shift in the actual company performance or direction.

 

Read the full article published originally on Financial Express: Stock markets: Check parentage of target company before betting on it