Factors Analysis Of China’s Stock Market Volatility

With the continuous development of China’s stock market, it has had a profoundimpact on the national economy, and the volatility of the stock price has played animportant role in the investors’ systematical analysis about the risks and benefits, theeffective regulations, and the realization of the listed companies to maximize theirshareholders’ revenue. And what’s more, both the research on the fluctuations in thestock market and the cause analysis of stock market volatility can provide animportant reference for the majority of investors, the listed company’s dailyoperations.This paper focuses on the study of the interaction between the stock market andthe macro-economic factors, the transaction-behavioral factors, and informationdisclosure; firstly the author analyzed the interaction between these four factors above,based on which the author proposed several strategies to deal with fluctuations of thestock prices, put forward his prospects, and made a number of targeted and practicalpolicy recommendations.This paper can be divided into three parts logically:The first part analyzes the macroeconomic factors, and their impacts on themechanism of action of the stock market which include: the impact of themacroeconomic factors, macroeconomic policy and market factors;The second part analyzes the transaction-behavioral factors, and their influenceson the working mechanism of the stock market, which include: the impact ofinstitutional investors and investment behavior characteristic of small investors inChina’s stock markets;The third part analyzes the information disclosure and its impact on themechanism of China’s stock market Including the impact of stock market informationand insider trading;In the course of the study, author use the analytical method theoretically and empirically and the theory and knowledge about econometrics; After the research,the author got some conclusions as follows:Firstly, the macroeconomic and its policy will get an increasing impact by thestock market with its continuous development of the size, structure and operationalmechanism, and then our government will include the stock price index in theauxiliary monitoring indicators of macroeconomic policies and regulate the stockprice based on a moderate, reasonable standard.Secondly, the small investors in China’s stock market not only have the problemsof self-hypnosis, sentimentalism and simplified inspiration, but also follow theexperts blindly, have no confidence in the government authorities with a high degreeand have an expectation of over panic. At the same time, they also have confidenceand optimism blindly and focus not on the financial statements of listed companiesbut on the insider information eagerly, and they attach more importance on thepositive information which can improve their confidence of investments but on theother hand, they turn a blind eye to the negative information.Thirdly, in the study of factors affecting China’s stock market volatility, theauthor mainly studied the mechanisms of information disclosure and its conduction,and then reached the following conclusions: the information of the stock market canpossibly get leaked in advance at the macro and micro point of view, which enable theinformation disclosure and spread mechanism to exist a very serious problem. Sincethe public information becomes increasingly privatized, the stock market has a lot ofprivate information trading, which made the market prices severely distorted, andthen made the stock market fluctuate anomaly.