Literature review of market sentiment: definitions, determinants, outcomes, and key research gaps

Purpose The article reviews, consolidates and advances the literature in the field of market sentiment (MS). Design/methodology/approach We performed an extensive literature review of 194 studies published in top journals, defining MS, analyzing the existing literature and providing a framework incorporating antecedents and consequences of MS. An in-depth analysis recognizes major themes on MS, focusing upon theories, measurements and impacts. Findings The field of MS is witnessing the evolution of various theories and perspectives. However, there is neglect in integrating MS perspectives with behavioral finance. There is also a lack of consensus among researchers about the proxy of measuring MS. We also observe a need to compare existing studies, which is absent due to the difference in the tools of analysis. MS influences the various securities and creates fluctuations in their prices. Originality/value The framework links antecedents, tools and data with outcomes. We derive future research directions along each of the themes to assist future research, practice and policy.