The Impacts Of Investor Sentiment On Stock Market Returns

The early 90 s of last century,the Shanghai Stock Exchange and Shenzhen Stock Exchange have been established,the development of China’s securities market began.20 years,China’s securities market has made from scratch,from small to large remarkable achievements.As of May 4,2015,China’s listed companies accounted for the first time the proportion of global market capitalization exceeded 10%,second only to the US stock market’s second-largest stock market,but look at the history of China’s securities market,we have to admit,Compared with foreign mature markets such as Europe and the United States,China’s securities market in the market mechanism,laws and regulations,market supervision,there are still many problems can not be optimistic.First of all,China’s securities market in a serious policy bias.Since China’s securities market is not formed on the basis of relatively perfect capital market development,many mechanisms of China’s securities market are established under the leadership of the government,which inevitably may exist policy loopholes and inconsistent with the actual situation Therefore,there is a certain relationship between the fluctuation of China’s stock market and the instability of China’s securities market.Second,China’s securities market in the irrational investors.China’s securities market has experienced several ups and downs of the stock market,which to some extent,highlights the Chinese securities market and the irrational investors.Due to the ineffective market and the investors’ investment idea,investors in our stock market pay more attention to the policy,insider and grapevine,which are not related to the fundamentals of the company.Therefore,investors in China’s securities market are also more vulnerable to Market information,interference,often over-reaction or herding effect and so on.Thirdly,the market mechanism and supervision measures of China’s securities market are not perfect.In the past 20 years,China’s securities market has made great achievements in terms of products,mechanisms and legal system,but there is still a lot of problems in China’s securities market.On the one hand,delisting,short selling mechanism is not perfect,resulting in the market can not effectively reflect the short selling information;the other hand,inadequate supervision,which often resulted in the use of institutional loopholes in speculators,resulting in larger market volatility,Further lead to market crisis.Based on the above,this paper studies the influence of investor sentiment on the stock return rate of China’s securities market from the perspective of behavioral finance,and further explores whether different investor sentiment has effect on stock return Finally,it puts forward some policy suggestions to mitigate the irrational behavior of China’s securities market.This thesis consists of five parts.The first part is the introduction,which mainly discusses the background and significance of this paper.The second part is literature review,which mainly reviews the current research situation both at home and abroad.The third part is the empirical part.This paper is divided into two parts,the first one is the overall impact of investor sentiment on stock returns,and the cross section effect of second investors’ different emotional characteristics on corporate stock returns.The last part is the conclusion and policy recommendations.The conclusion points out that investor sentiment has general effect and cross section effect on stock returns.According to the reality of the investor in China’s securities market sentiment,on the one hand,our country government and the securities market supervision department shall make corresponding preventive measures to prevent possible risks to the securities market in our country;on the other hand,the Chinese government and securities market supervision department should be based on investor sentiment further establish and improve China’s securities the market trading system,supervision system,guide the correct concept of investment in the market,optimize the structure of investors.