Most of fluctuations lines we observe in Intraday or short-term market movement graphs of stock markets are nothing but sentiments of crores of share investors.
Sentiments Drove Stock market Indices:
As investors in stock markets is finance related issues traders are droved by both fears and greed. Most situations cause more conscious than real situations.
Rumors, the worst market terms inducing an intense downtrend in a specific stock or on the whole index. The Rumor is a Negative Sentiment Factor. Even it is not confirmed or even condemned by organization or company downtrend continues to fluctuate. Here the negative sentiment was strongly enforcing the minds of stock markets investors.
Opposite to above situation is the post election story, after UPA government completely in central government without left parties, made market traders displacing from positive sentiment to heavy positive sentiment plus crowd behavior plus higher greed all make markets to touch upper circuits.
Sentiment Issue Mostly Concerned For Retail Investors showing characteristic crowd behavior sometimes effect markets far beyond from actual stock market and economic position.
GREED AND FEAR are different terms from sentiment. Sentiment reflects near to actual situation, but also a technical pattern of investment.
India Traders And Sentiment:
In countries like India with investors of little or no knowledge on basics of stock markets, structurally sentiment completely depends on Fii’s outlook, funds marginal investments, and most brokers’ analysis.
Long-term view and investment:
But in justification, sentiment effects on long-term markets are negligible as company’s fundamentals not change daily like investors sentiments. So complete sentiment based strategy investors are likely antagonized for long-term investment.
In fact sentiment means belief which is an indirect term appearing likely unrelated to either stock markets, economy. But a major limiting agent directing stock indexes.
Finally sentiment alters stock markets, economy ultimately investors, but in an complex, interrelated, indirect fashion. Study and clear analytical based investment on it is likely more tedious, but huge profits with minimum risk
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