EFFECT OF INVESTOR SENTIMENT ON STOCK MARKETS
Motivation of this study is to examine the relationship between investor sentiment and stock
market by taking financial crisis period into account. When literature is examined, it is seen that there
is a deficiency in this respect. Although there are studies examining same phenomena, none of them
has considered the impact of financial crisis. To eliminate this deficiency, we have employed tests with
structural breaks rather than conventional ones. At the end of these tests, structural breaks are observed
at crisis period as it is expected. By employing data for the period December 2003- December 2012
existence of co-integration, which is an indicator of a long-term relationship between variables, is proved.
This is a significant insight showing that consumer confidence index is a critical factor which is in an
interaction with stock markets.
Keywords: Stock Markets, Investor Sentiment, Consumer Confidence Index, Financial Crisis,
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