An evaluation of investors' behavior and sentiments during heavy fluctuation in stock index; A case study of Pakistan Stock Exchange

Abstract

The role of stock exchange is highly dynamic regarding the capital mobilization in Pakistan and
contributes an important role in overall financial sector of economy. The chief purpose of this
article is to analyze the behavior and sentiment of investors during the heavy fluctuation in Stock
Index at Pakistan Stock Exchange (PSX). The sentiment indexes for stock exchange selected for
this research are Total Market Capitalization, Total Listed Capital - Rs., KSE-100" Index, KSE-30"
Index, KMI-30 Index, PSX-KMI All Shares Index, New Companies Listed during the year, Listed
Capital of New Companies - Rs., New Debt Instruments Listed during the year, Listed Capital of
New Debt Instruments - Rs., Average Daily Turnover - Shares in million, Average value of daily
turnover - Rs And Average Daily Turnover (Future). The indicators are analyzed by Correlation
Analysis. The results prove that investor sentiment has positive effect on market returns.