Abscisic acid is known as the stress hormone because of the following reasons :

1. It helps plant to cope with adverse environmental conditions or stresses.  

2. It causes temporary closure of stomata due to which there is reduction in the rate of transpiration. Therefore, it acts as antitranspirant and reduces water loss. 

3. It acts as a general growth inhibtor and inhibitor of plant metabolism

4. It inhibits seed germination.

5. It induces dormancy to escape the unfavourable conditions.