The Effect Of China's Institutional Investors' Behavior On The Stock Market Fluctuation

In the process of continuous development and improvement of China's capital market,institutional investors which are as investment participants in the capital market play an important role.The emergence of institutional investors is a product of social division of labor and specialized development of economic activity.In the stock market,institutional investors not only have the advantage of information,capital,technology comparing to other investors,but also its behavior of investment or characteristics of preference,will have a significant impact on the stock market.So far there have been two violent fluctuations in China's stock market when it develops,and our community generally believes that the individual investors as the main structure of investors in the stock market,is the major factor contributing to the volatility of China's stock market.However,as we all know,in addition to individual investors,institutional investors are also included in investors of stock market.With the development of China's economy and finance,the number of institutional investors such as securities investment funds,insurance companies,social security funds,QFII and the number of funds that they have mastered are increasing.Investors in the stock market and their influence are becoming more diversified.The status of institutional investors in stock market is increasingly prominent.And institutional investors and its impact has become an important factor affecting the stability of the stock market.Based on the review of relevant literatures,first the paper presents the basic situation and changes of investors' structure in China's stock market,and then we analyze the institutional investors' behavior of investment and influencing factors.Then the empirical study on the market effect of the institutional investors' behavioral preference is carried out,we choose the quarterly data of the institutional investors' holdings,and establish the multiple regression models,and then we analyze the impact of institutional investors' preference on market stability.Empirical research shows that institutional investors' behavior of investment does not effectively play a stable effect on the market;on the contrary,it intensifies market volatility to some extent.Finally,based on the above research,the paper puts forward some relevant policy suggestions.