Rationality of Indian Investors amid Uncertain Times during Covid-19

The present paper aims to analyze the investment decision-making through investor sentiments influenced by three latent variables namely, herding behavior, market factors, and best game in town factors during the lockdown period (March 25, 2020 to May 31, 2020) announced due to COVID-19 in India. A total of 216 people responded to the structured questionnaire floated on various platforms. Structure equation modeling (SEM) has been applied to discern the formulated objective using SPSS and AMOS software. The results were startling as it portrays an Indian investor to be rational in the times of crisis as it is found that investors gave an upper hand to the fundamentals of the company while investing rather than their own sentiments. A gradual rather than a swerved change in the investors’ perception could be observed which is in the betterment of the economy as a whole. Further, overreaction to the news pertaining to the uncertain events is prevented as the investors’ hold their water in the upheaval situation. This study could be of use to the financial advisors for understanding the new behavior of an Indian investor in the times of pandemic. This makes the role of the investors’ bigger as they safeguard the movement of stock markets and avert the stock market doom.