An Investigative Study of Herding Behavior In Indian Stock Market: A Global Perspective

Abstract

The herding behavior (HB) in stock market is derived from market or investor's
sentiments mainly due to predictions and speculations based on group rather
than individual decision and are either logical or illogical. Profit and losses or
volatility of the stock market is governed by various factors like firm performance,
investor sentiment, economic policy, inflation or deflation. The selection of right
stock requires a thorough analysis by evaluating company's history, business
activities, market capital, quarter and annual results, present and future
expectations, daily, weekly and monthly analysis. The market pulse is generated
through overall condition, price fluctuations; trading volume of the stock; therefore
these parameters should also be considered in stock selection and profitable
investment. The study is a view point discussion focusing time span of 2012 to
2018. This comprehensive review highlights a brief scenario of global exchange
market, the factors regulating market movement, herding habits in global stock
exchanges and India's market sentiments. Moreover, analysis of various tools
and techniques based on measurements and impact of HB are also discussed. In
conclusion, any country's economic reform strategies should take into
consideration the local as well as foreign investment in stock market and should
be cautious and alert in taking prompt decision during any type of market crash.