Analysis of A-share Premium Effect Based on Investor Sentiment Perspective

There is a premium effect in the Chinese stock market, which is affected by market sentiment and investor sentiment. This paper analyzes market sentiment and investor sentiment to explain the causes of the premium effect in Chinese stocks and discusses how sentiment affects the premium effect and proposes optimized investment strategies. After systematically combing and deeply summarizing the relevant literature, this paper applies literature analysis to deeply analyze the intrinsic connection between market sentiment, investor sentiment and stock premium effect. The results show that market sentiment and investor sentiment have a significant positive impact on the stock premium effect, the stock price fluctuates with the sentiment, and both of them have an important impact on the stock premium effect by influencing the market supply and demand relationship and investors' decision-making behavior. This paper provides certain investment strategy insights for investors and also deepens the related theory of the premium effect, which helps to improve the theory of behavioral finance and reveal the impact of irrational behavior in asset pricing.