Market stability refers to a condition in which financial markets operate smoothly without excessive fluctuations in prices. This stability is important because it helps investors make informed decisions, encourages long-term investments, and fosters economic growth. When markets are stable, businesses can plan for the future with greater confidence, leading to a healthier economy. Factors that contribute to market stability include government policies, central bank interventions, and investor confidence. These elements work together to minimize volatility and reduce the risk of sudden market crashes. A stable market environment is essential for maintaining trust among investors and ensuring the overall health of the financial system.