Abstract
Investors’ behavior and perception towards stock indices performances of the stock market was taken into account for this study. Relevant data was collected from 416 equity investors indulged in the stock market situated in diverse parts of southern Tamil Nadu, India. This research focuses on how the investors’ perceptions regarding stock indices movements of stock markets are affected by their irrational behavior, rational behavior and decision making behavior. In this study SEM approach was applied to analyze the data. The observations from the study disclosed that, the hypothesized model has a good fit and indicates that the anticipated model has the adequate fit, by way of satiating the suggested values. The finding indicates that investors are partly rational and partly irrational because they collect complete financial information and use this information for investment decision making and also use short cuts for decision making.Â
Highlights
Financing in equity shares gives a chance to become a part of the possession of the business and gives regular revenues as dividend income and capital appreciation
Behavioral finance theories adopt that distinct investors are not constantly composed and do not include industry, vital and technical investigation in investment judgments. It emphases on how depositors essentially collect and comprehend information in order to make verdicts created on evidence and explores the impact of intellectual and emotions on speculation conclusions
Several studies made huge contributions to the knowledge of how investors should behave in the stock market and how the investors behave in the stock market and its effect in the decision making procedure, they lack overall picture of relationships between the behavioral and traditional finance aspects and the investors’ views about the stock market indices performances and how the stock indices performances are affected when rational and irrational groups of investors behave in different fashion
Summary
Financing in equity shares gives a chance to become a part of the possession of the business and gives regular revenues as dividend income and capital appreciation. Behavioral finance theories adopt that distinct investors are not constantly composed and do not include industry, vital and technical investigation in investment judgments. It emphases on how depositors essentially collect and comprehend information in order to make verdicts created on evidence and explores the impact of intellectual and emotions on speculation conclusions. International and domestic instability, war crimes, fraud and domestic or political unrest terrorist attack, scandals, and high oil price affect the stock market negatively These factors including increase in inflation rate, increase in interest rates decrease or erode consumers spending capacity which may lead to lower business profits. This research focuses on how the investors’ perceptions regarding stock indices movements of stock markets are affected by their irrational behavior, rational behavior and decision making behavior
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