Financial markets are often thought as unpredictable whose movements often are not justified or backed by reasonable explanations. A lot of researchers throughout the globe have tried to study the investor sentiment.

A similar endeavour is being carried out by the Research Project Team of Shaheed Sukhdev College of Business Studies, University of Delhi, under the Delhi University Innovation Project.

The team comprising 10 students from the course of Bachelors of Financial and Investment Analysis (BFIA) are working on the project ‘Investor Sentiment in The Indian Financial Market: An Empirical Study’.

They have created an index to measure the investor sentiment using secondary data under the guidance of three faculty members.

The shortlisted variables, namely Put Call Ratio, Turnover, FDI inflows amongst others are expected to reflect investor sentiment. These reflectors were statistically reduced to an index which is currently in the testing phase.

The final findings will be published after the completion and presentation of the project in Delhi University in May. The research project, if successful, would help government agencies in better policy formulation and will also assist the investors in improving their returns.

(Puneet and Nidhisha are students of Shaheed Sukhdev College of Business Studies, University of Delhi.)

(This article was published on January 23, 2013)
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