The stock market is a crucial component of the financial system, playing a significant role in economic development and wealth creation. Traditional financial theories assume that investors behave rationally and make decisions based on complete information. However, practical market observations reveal that investor behavior is often influenced by psychological, emotional, and social factors. This study aims to examine stock market trends and analyze how investor behavior impacts market movements. The research adopts an empirical approach using both primary and secondary data. Primary data is collected through structured questionnaires administered to individual investors, while secondary data is obtained from stock market indices, financial reports, and published research studies. Statistical tools such as percentage analysis, correlation, and graphical interpretation are employed to analyze the data. The findings reveal that investors frequently exhibit behavioral biases such as herd behavior, overconfidence, loss aversion, and risk aversion. Market trends show significant volatility during periods of economic uncertainty, indicating emotionally driven investment decisions. The study concludes that investor behavior plays a vital role in shaping stock market trends and that incorporating behavioral finance concepts can enhance investment decision-making and market stability.
K. Perarasu (Thu,) studied this question.