The Effect Of Investor Sentiment On Stock Price Synchronicity

Since its inception in 1990,the Shanghai stock exchange,the development of China’s a-share market for 30 years,although this 30 years our country capital market on policy support a lot,have had many changes in regulation and innovation,but our country capital market still has not yet mature,and the running efficiency of the capital markets of developed countries,legal system,and also there is a big gap between professional investors,etc.China’s investors are divided into individual investors and institutional investors,among which individual investors account for the majority of the number of market investors,while institutional investors only account for a small proportion.And from the market capitalization ratio,the proportion of individual investors is still greater than that of institutional investors.Individual investors due to the limited investment capacity,lack of professional knowledge,the economic level is low,less study time,access to information channels,access to information lag,etc.,often can’t make the most benefit of investment decisionmaking,and individual investors are more susceptible to emotional impact,so often make irrational investment behavior.There are a lot of foreign financial,economic theories,has been quite mature,and can be better verified in the capital market.However,due to the particularity of China’s national conditions,culture and human feelings,and the fact that China’s capital market is still in its developing stage,these theories cannot be well confirmed in China’s capital market.Therefore,it needs to be explained from the aspects of behavioral finance,investor sentiment and psychology.The study of investor sentiment can better fit with some phenomena of China’s capital market,and provide a new perspective for the interpretation of abnormal market fluctuations,so as to improve the existing research and improve China’s capital market.This article first elaborated the research background and significance,the domestic and international literature in the literature of investor sentiment and the stock price synchronicity is summarized,and to explore the behavioral finance theory of limited rational investment theory,the investor sentiment theory and information theory,analyses the investor sentiment and the stock price synchronicity,found that when investor sentiment rises,stock price synchronicity will get higher,as investor sentiment dropped when stock price synchronicity decreases;In addition,when individual investors account for the majority of the market value of a single stock,the stock price synchronicity will further increase;on the contrary,when institutional investors account for a large proportion,the stock price synchronicity will further decrease.Second further to individual and institutional investors in our stock market investment psychology and behavior of reality investigation,and then,on this basis,the selection of China A stock market during the period of 2020.6.1-2020.9.1 stocks--the investigation into Hangxiao 50 data as sample data,on August 11,2020 days the wind Hangxiao issued by the securities company research report for the incident,with(-15,+ 15)for the event window,to(-50,-16)estimated for the event,summing up the excess return performance of the company’s stock price relative to the market return rate in 15 working days before and 15 working days after the release,studying the relationship between stock price synchronicity and investor sentiment.Finally,the paper puts forward some policy suggestions to further improve China’s stock market investment,including improving the company information disclosure system,enhancing the knowledge of individual investors in investment,enhancing the investment system of investors,improving the investment philosophy of investors,standardizing the behavior of listed companies and guiding the orderly and effective development of institutional investors.