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The Market moves by the Demand & Supply concept. When there is more demand for shares their prices go up. When there is an excess supply of shares the prices go down.

When would an excess supply of shares happen?

When everyone is trying to sell their shares

Why would everyone want to sell their shares?

1. When they are afraid what would happen to the companies they hold

2. When they are short of cash and want to raise some cash to meet their requirements

Because of the economic crisis both the above mentioned reasons became true. People were heavily concerned about the future of the companies they hold shares and also they were running short of cash. So people started selling their holdings in thousands.

This is the reason for the Market slump...

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16y ago

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