Effect of Investor Sentiment on Stock Markets

Bolaman, Özge; Mandaci, Pınar Evrim

doi:10.14784/jfrs.2014117327

Cited by 15 publications

(9 citation statements)

References 35 publications

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“…In contrast research [22], [23] stated no relationship between trading volume and returns on stock indices on the stock market. In addition, research [24,25] suggests an influence between consumer confidence and stock prices. In contrast to research [26], it states that the relationship between consumer confidence and stock prices is counterintuitive.…”

Section: Introductionmentioning

confidence: 99%

The Investor Sentiment and Market Reaction Before and During The Covid-19 Pandemic on Indonesia Stock Exchange

Ernawati¹,

Nugraha²,

Waspada³

et al. 2022

Proceedings of the 6th Global Conference on Business, Management, and Entrepreneurship (GCBME 2021)

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This research was conducted to analyze investor sentiment on market reactions over two different periods. The analysis was conducted before and during the covid-19 pandemic on the Indonesia Stock Exchange. Investor sentiment uses trading volume proxies and consumer confidence indexes while market reactions use The Composite Stock Price Index (IHSG) proxy. Data collection with documentation and using a quantitative approach. The results prove that before the covid-19 pandemic investor sentiment did not influence the market reaction. On the contrary, during the covid-19 pandemic investor sentiment influenced the market reaction. Trading volume is a variable that has a positive and significant effect on IHSG, otherwise, the consumer confidence index does not affect IHSG. During the pandemic, the share price was at a low point and consumer confidence dropped to pessimistic. At short-selling, irrational investors will tend to make transactions, when their pessimistic investors buy falling stocks in the hope of higher returns after the pandemic. Investor sentiment causes a difference in stock price sensitivity patterns. Investor sentiment produced by trading volume is a source of positive risk caused by information that existed during the Covid 19 pandemic.

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Section: Introductionmentioning

confidence: 99%

The Investor Sentiment and Market Reaction Before and During The Covid-19 Pandemic on Indonesia Stock Exchange

Ernawati¹,

Nugraha²,

Waspada³

et al. 2022

Proceedings of the 6th Global Conference on Business, Management, and Entrepreneurship (GCBME 2021)

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“…In a study conducted by Topuz (2011), using Granger causality analysis for the period 2004-2009, the causality relationship between the BIST 100 index and CCI was examined, and as a result of the analysis, it was determined that there was a unidirectional causality from stocks to consumer confidence index. In a study conducted by Bolaman and Evrim Mandacı (2014), they examined the relationship between NDI and stock returns for the 2003-2012 period using the Gregory-Hansen cointegration test and stated that there is a long-term relationship between the two variables because of the study.…”

Section: Consumer Confidence Indexmentioning

confidence: 99%

The relationship between Consumer Confidence Index and BIST 50 Index

Huseynli

2022

JEECAR

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Decisions made by consumers depending on psychological factors affect the incomes of companies and, accordingly, the financial markets. In this study, the causality relationship between consumer confidence index, BIST 50 index and BIST electricity is discussed. In this study, which was conducted with the assumption that there may be a causal relationship between the consumer confidence index and BIST 50 and BIST electricity indices, the causality relationship between the consumer confidence index, BIST 50 index and BIST electricity index was examined with the Granger causality test covering the periods 2012:01-2022:06. As a result of the tests carried out considering the lag lengths, a one-way causality relationship was determined between the BIST 50 index and the BIST electricity index.

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“…One of the factors which plays a significant role in the stock market is the confidence of investors or investor’s sentiments towards the stock market in the economy. Investor sentiment index in equity is found to affect the stock returns positively in the market (Anusakumar et al, 2017; Bolaman & Mandaci, 2014; Oprea & Brad, 2014). However, some studies has also shown a negative relationship between the two (Schmeling, 2008).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Chang et al (2009) in their semantic paper have examined and found a significant role of individual investor sentiment index in predicting the stock returns in developed as well as developing countries. Bolaman and Mandaci (2014) have studied and found a positive long-term relationship between investors’ sentiments and Turkish stock market while taking financial crisis period into account. Anusakumar et al (2017) have worked on the sentiments of investors and its impact on the equity stock returns by categorizing the sentiments as stock-specific and market-specific.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of the Commodity Futures Market Performance: An Indian Perspective

Dubey

Shankar

2020

South Asia Economic Journal

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This article aims to find out interlinkages between equity and commodity markets through the channel of investors’ outlook in the equity market. The proxies used for gauging perception of investors are investor sentiment index and Advance–Decline ratio. The study also incorporates the introduction of Commodity Transaction Tax (CTT) and occurrence of National Spot Exchange Limited (NSEL) scam in the year 2013. Additionally, returns in commodity market are examined to be a function of equity returns. The empirical findings suggest that the liquidity of commodity futures is inversely related to investor sentiments in equity market, and commodity returns are also negatively related to equity returns. Therefore, equity and commodity markets are inversely related, as liquidity in both the markets reacts to the investor sentiments; contrarily, commodity returns experience a significantly negative impact from equity returns. Additionally, the results also provide evidence that investor sentiment in equity possesses the ability to predict liquidity in the commodity futures market. The study also suggests that the CTT and NSEL scam have significantly and positively affected the liquidity of the Indian commodity market.

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Effect of Investor Sentiment on Stock Markets

Cited by 15 publications

References 35 publications

The Investor Sentiment and Market Reaction Before and During The Covid-19 Pandemic on Indonesia Stock Exchange

The Investor Sentiment and Market Reaction Before and During The Covid-19 Pandemic on Indonesia Stock Exchange

The relationship between Consumer Confidence Index and BIST 50 Index

Determinants of the Commodity Futures Market Performance: An Indian Perspective

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