Understanding the Impact of News Articles on the Movement of Market Index: A Case on Nifty 50

TL;DR

This paper investigates how sentiment analysis of news articles across various topics like politics, sports, and markets influences the movement of the Nifty 50 index, highlighting the significance of topic-specific sentiments.

Contribution

It introduces a comprehensive analysis of topic-specific news sentiments and their impact on stock index movements, filling a gap in existing research.

Findings

Sentiment scores of news on different topics significantly affect Nifty 50 movements.

Topic-specific sentiment analysis provides better insights than overall sentiment scores.

Different news topics have varying levels of influence on the index.

Abstract

In the recent past, there were several works on the prediction of stock price using different methods. Sentiment analysis of news and tweets and relating them to the movement of stock prices have already been explored. But, when we talk about the news, there can be several topics such as politics, markets, sports etc. It was observed that most of the prior analyses dealt with news or comments associated with particular stock prices only or the researchers dealt with overall sentiment scores only. However, it is quite possible that different topics having different levels of impact on the movement of the stock price or an index. The current study focused on bridging this gap by analysing the movement of Nifty 50 index with respect to the sentiments associated with news items related to various different topic such as sports, politics, markets etc. The study established that sentiment scores of news items of different other topics also have a significant impact on the movement of the index.