Sentiment Analysis

News Sentiment for 50+ Companies from BSE 500 Hits 2-Year Low

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Unstructured data sets such as News is the first credible source of information that can offer insights into both the present and future prospects of the company. The application of news data in the risk assessment of corporate borrowers helps in capturing important events and red-flags which can have impact on the company’s operations at a later date.

In our view, a significant drop in the company’s news sentiment can be a potential red-flag and at the same time, an early warning signal of future under-performance.
  
Our analysis of news data has shown a steep decline in sentiment score for 50+ companies from BSE 500 Index to a 2-year low. Here, we present the heat-map for top 20 companies witnessing significant drop in news sentiment score.

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COVID-19: Developed Countries to Absorb Economic Shock Sooner than Developing Nations

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With a rapid surge in the number of cases and mounting death toll, the coronavirus pandemic is wreaking havoc across the globe. So far, COVID-19 has claimed more than 1,25,000+ lives and has infected over 2 million people in more than 200 countries and territories around the world.

The death toll and the number of people infected by COVID-19 shows that the developed nations are the worst affected compared with the developing countries. The US led the number of casualties from Coronavirus, followed by Italy, Spain, France and the UK. These 5 countries constituted nearly 3/4th of the total number of deaths due to Coronavirus.

The rapid spread of Covid-19 has forced the governments around the world to announce Lockdowns, which has not only impacted the lives of people but also halted the overall global growth. The closure of plants and operations announced by companies from almost all the industries led to a short-term collapse in the global output.

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) has recently said that global growth will turn “sharply negative” in 2020, as COVID-19 has disrupted the world’s social and economic order “at lightning speed and on a scale that we have not seen in living memory”.

Though the developing countries have not witnessed major casualties, the economic shock triggered by COVID-19 will have devastating impact on both the formal and informal sectors of the economy.

On the other hand, the developed countries, with their financial might, are better placed to absorb the economic shock compared to the developing economies.

Heckyl’s Analysis of News Sentiment around Economic Indicators has also shown that the Developing Countries are most vulnerable to Economic shock than the Developed Countries.

India, Bangladesh, Indonesia and Philippines have recorded a downtrend in the Economic News Sentiment (200-DMA) after a spike in the number of coronavirus cases in March’2020 and subsequent announcement of Lockdowns.

On the contrary, the US has shown an improvement in its Economic News Sentiment helped by an announcement of Rate Cut and Liquidity Measures by the Fed along with USD 2 Trillion stimulus plan unveiled by the US government to cope up with the impact of the coronavirus crisis.

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FiND Sentiment Indicator turns bearish 4-days prior to DJIA crash on October 10

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The Dow Jones Industrial Average (DJIA) index witnessed a significant fall in the past week amid concerns over a surge in bond yields and trade war between the US and China. In our view, news sentiment based strategy can help investors to predict an impending movement in the market.

Heckyl has developed FiND Sentiment Indicator which reflects the underlying sentiment of news coverage on the companies within the index. The moving average strategy based on FiND Sentiment Indicator signals the potential impact of the news sentiment on the value of the underlying index.

For instance, FiND Sentiment Indicator turned bearish 4-days prior to the 832 points crash in the DJIA index on October 10 (Image 1). Our system analyzed 1,01,066 news items for 30 companies within the DJIA index for the past 6-months. Out the total, 74,780 news items were positive, while 26,286 news items were negative.
DJIA Sentiment - Signals
[Image 1: Bullish/ Bearish Signals defined by Sentiment Indicator Strategy vs. DJIA]
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Air India continues to lead news share of voice for 2nd quarter

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India’s national carrier Air India led the news share of voice (SoV) among major airlines for the second quarter in a row. On the other hand, the news SoV for Interglobe Aviation remained at the second position in the June 2018 quarter. Meanwhile, Jet Airways and SpiceJet’s news SoV for the quarter stood at third and fourth positions respectively.

Airlines Share of Voice
[Image 1: Top 4 airlines’ web news share of voice]
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Sun Pharma’s positive news volume jumps in Q1 to highest level in past 4-quarters

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Sun Pharmaceutical Industries witnessed a significant improvement in the positive media coverage during the June 2018 quarter. Regulatory approvals and encouraging earnings led the positive news coverage for Sun Pharma in the June 2018 quarter.

At the same time, the volume of negative news has also dropped sharply in the same period. As a result, the long-term news sentiment has improved towards the end of the quarter.

Moreover, the improvement in news sentiment was also reflected in the recent rally in Sun Pharma’s stock price. Net-net, the news cycle was favorable for India’s leading drug maker in the June 2018 quarter.

Sun Pharma
[Compare screen: Sun Pharma – Share Price, News Volume, and Sentiment]

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