A Study on Impact of Company Specific News on Investor s Decision in India

Abstract

quotBackground: In recent years, huge volume is observed in financial news. Earlier, the financial news were restricted to the print media only but now trend has changed. The electronic media have increased the coverage of financial news. It becomes very complex for the investors to take investment decision because of huge flow of information. In this scenario, it becomes essential to learn the impact of financial news in particular company specific news on the stock prices. There are many factors which have impact on the stock prices like global factors, economic factors, industry specific factors, company specific factors, market capitalization of stock, liquidity of stock, historical return, management of company, product and services of the company, investor behavior and many more. Investors reaction at the time of news announcements are reflected in the stock prices. Ability to understand the price behavior during the event announcement and after the news announcement can facilitate to earn better earning to the investors. newlineFundamental and Technical analysis can assist investors in finding undervalued stocks and earning good return. If investors are able to learn the reaction of stock during news announcement it can also help in earning good return. The event study can help in measuring the impact of news. But it is very essential to understand the sentiment of news. The news can be classified as positive news, negative news or neutral news based on the sentiments. As per (Chiang (2010)), good and bad news have positive and negative impact on the investors sentiments respectively. Even the magnitude of reaction of good/bad news is different during the bull and bear trend of the stock market. There are many research studies carried out to understand the investors psychology with the help of event analysis. But a few research studies carried out in India focused on the impact of company specific NEWS on investors decisions with the application of sentiment analysis. newlineAim: The primary objective of this PhD thes