INVESTOR SENTIMENT AND MARKET MOVEMENTS: A THEMATIC ANALYSIS APPROACH IN BEHAVIOURAL FINANCE

Financial markets are not just ruled by numbers or economic models-they are shaped by the feelings, stories, and reactions of the people who participate in them. This study takes a closer look at how emotions like optimism, fear, and uncertainty ripple through the world of investing, driving decisions in ways that sometimes defy logic. Using insights gathered from news stories, executive calls, Reddit conversations, and expert market analysis between 2020 and 2025, we reveal a vivid picture of how investor sentiment directs the flow of the markets. We find that contagious waves of hope or anxiety often push prices away from their true value, resulting in asset mispricing. With the rise of digital media and social platforms, these sentiments can now spread faster than ever-turning single news events or viral discussions into full-blown market swings. This collective behaviour is deeply human; when people see others buying or selling, emotion can overcome reason, leading to herding and abrupt shifts in the market. Yet, some investors choose to go against the tide, spotting opportunities when the crowd’s mood swings too far-demonstrating the value of contrarian investing. Ultimately, financial markets are as much about psychology, emotion, and social conversations as they are about profit and loss. By shedding light on these very human dynamics, our research helps investors, analysts, and policymakers appreciate why moods and stories matter, equipping them to better navigate a marketplace where emotion and logic constantly intersect. Keywords: Investor Sentiment, Market Movements, Behavioural Finance, Asset Mispricing, Contrarian Investing