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Market mood index and stock market. Evidence from National Stock Exchange

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  • Neha SETH

    (Central University of Rajasthan, India)

  • Yogesh KUMAR

    (Central University of Rajasthan, India)

Abstract

This study examines the time-series relationship between investor sentiment and the Indian stock market. Investor sentiment is measured through the market mood index (MMI); MII is a tool that shows the investor's emotions regarding the market and helps the investor, traders, etc., to know the current state of the market, i.e., extreme fear, fear, greed, extreme greed. Empirical results show that market sentiment generally lies between fear and greed mood. To check long-run relationships, we apply the Autoregressive Distributed lag test; the result shows a long-term relationship. Empirical results also show a bi-directional Granger causality relationship exists between the variables.

Suggested Citation

  • Neha SETH & Yogesh KUMAR, 2023. "Market mood index and stock market. Evidence from National Stock Exchange," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(634), S), pages 263-272, Spring.
    • Handle: RePEc:agr:journl:v:1(634):y:2023:i:1(634):p:263-272
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    References listed on IDEAS

    as
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