News sentiment for 308 companies from the S&P 500 index stood above 12-month average in July 2017, according to a study conducted by Heckyl Technologies. Many of these companies are from financials, consumer discretionary, industrials, and health care sectors.
Overall news sentiment for S&P 500 companies remained buoyant in July. News sentiment average for July was positive for 474 companies indicating overall optimism in the S&P 500 index, the leading indicator of US equities.
At the same time, 56 companies primarily from health care, financials, and industrials witnessed a jump in monthly news sentiment average to 1-year high in July. Lockheed Martin Corp, Blackrock, The Charles Schwab Corp, Adobe Systems Inc and Nextera Energy were some of the companies whose monthly news sentiment average surged to 1-year high.
Heckyl Media Monitoring Tool showed a shift in average news sentiment (from negative to positive) for more than 20 companies from top 500 listed companies recently.
In our view, regular monitoring of media coverage can help corporate communications team to analyze news patterns and track movement in underlying sentiment for their company as well as competitors.
Heckyl Sentiment index, which reflects a broad reading of collective sentiment for the Nifty companies, has turned mildly bearish for the 50-share index ending 2-month long bullish phase. Media sentiment for the broad-based index was in the bullish territory since the start of earnings season in April this year. The recent rate hike by the US Federal Reserve and selloff in technology shares weighed on the sentiment.
Voltas, the largest air conditioning company in India, has attracted positive press coverage recently. Heckyl News Analytics platform, which identifies positive and negative media coverage by scanning thousands of news and blog sources in real-time, has assigned the highest positive score of 100 to the Tata Group company for 3 out of 5 trading sessions during the previous week. Meanwhile, the average sentiment score for the past week stood at 84. Heckyl assigns sentiment score on a scale of -100 (very negative) to 100 (very positive).
Reliance Capital, a diversified financial services company, experienced a surge in news flow on Thursday after the Anil Ambani led company announced plans to separate out its retail health insurance business from general insurance.
The proposal is expected to enhance management focus on health insurance business. It will also help the company to unlock value by bringing in global leaders in this space as strategic and equity partners.
In today’s global economy, stock market bubbles are a part of life. Bubbles now inflate and deflate much more often than in the past. Free flow of money across markets and wider dissemination of information are partly responsible for formation of bubbles. It is created when the surge in asset price is not justified by its fundamentals. It burst with collapse in asset price when market sentiment turns.
Bubbles in the stock market are difficult to spot. So it is important for traders and investors to understand them to avoid being caught in a bubble. By leveraging the vast amount of news on the internet and applying sophisticated analytics, they can get collective sentiment about companies and market.