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Research Article | Open Access
Volume 14 2022 | None
Investor Sentiment and Market Volatility: An Analytical Study in the Context of Indian Stock Market
Ajay Kumar Saini
Pages: 3081-3085
Abstract
Market volatility and investor sentiment are key elements of the financial markets that have a significant impact on asset price and investment choices. Investor sentiment is the term used to describe the group psychology and emotional state of market participants that affect their sense of hopefulness, pessimism, or uncertainty on upcoming market moves. It is influenced by a wide range of variables, such as economic data, current affairs, and investment behavior. Positive emotion can boost demand and potentially reduce volatility, whilst negative sentiment might encourage selling pressure and raise market volatility. The amplitude and regularity of price swings in financial markets are gauged by market volatility. It depicts the degree of risk, uncertainty, and price volatility that investors encounter. Investors worry and caution result from high volatility, whereas confidence and risk-taking are promoted by low volatility. Investor sentiment and market volatility have a cyclical and mutually reinforcing relationship. A feedback loop can develop between investor sentiment shifts and market volatility changes. Positive sentiment can help to reduce volatility and promote a favorable market environment, whilst negative sentiment can raise volatility and cause periods of greater market instability. Market players and investors could more successfully manage market circumstances, reduce risks, and grasp chances for possible returns by understanding the complicated interplay between these components.
Keywords
India, Investor, Market, Sentiment, Stocks, Volatility
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