The equity market allows investors to buy ownership stakes in companies through shares. It includes major stock exchanges, electronic trading platforms, and over-the-counter markets. When investors buy shares, they become partial owners of the company and can benefit from price increases, dividends, and long-term growth.
The equity market plays a major role in the global economy. It helps companies raise money to expand, develop new products, or hire more employees. At the same time, it gives investors the opportunity to build wealth through stock appreciation and income. Market activity reflects how investors feel about economic conditions, company performance, and global events.
Equity markets can be divided into primary markets and secondary markets. In the primary market, companies issue new shares through IPOs or follow-on offerings. In the secondary market, investors trade existing shares with each other. Both markets work together to keep liquidity, transparency, and fair pricing in place.
The equity market helps companies fund growth and provides investors with opportunities to build portfolios, manage risk, and participate in the economy’s long-term expansion.
Companies raise money by issuing new shares through an initial public offering (IPO) or additional offerings. Investors buy these shares, providing the company with fresh capital. This funding can be used for expansion, research, acquisitions, or reducing debt. After issuance, shares trade in the secondary market, where price changes reflect supply, demand, and investor expectations.
Stock prices change due to company earnings, economic reports, interest rate decisions, geopolitical events, and overall investor sentiment. News about industry trends or major announcements — such as new products, leadership changes, or financial results — can also impact prices. Because many factors influence the market, prices often move quickly as new information becomes available.
Liquidity means investors can buy or sell shares easily without causing large price movements. Higher liquidity leads to tighter bid–ask spreads, faster execution, and more reliable pricing. Low liquidity can make trading harder, increase costs, and introduce risk. Investors often prefer highly liquid markets because they offer flexibility and better control over trades.
A company goes public through an IPO. Investors buy shares on the stock exchange. As the company grows and reports stronger earnings, more investors become interested, increasing demand and pushing the stock price higher.
