Vol. 2, Issue 1, Part B (2016)

Abstract
The present study is an attempt identify patterns between prospects for financial gain and mood of individuals. The study then illustrates loss aversion. It becomes imperative to know whether routine fluctuations in volatile instruments like exchange rate and stock exchange index cause significant changes in the mood of stakeholders. This becomes all the more essential as exporting business and financial markets have begun to flourish over the past few years with the advent of globalisation and liberalisation. The study is performed on 2 groups - investors in the stock market and exporters. The paper further aims to compare the strength of the relationship for groups defined on the basis of their stake in the process- total investment for investors and capital employed for exporting firms. Changes in prospects for financial gains are measured using changes in Nifty (stock market index of National Stock Exchange) for investors and US dollar-INR exchange rate for exporting firms. A mood is an emotional state. Moods differ from emotions, feelings or affects in that they are, less specific, less intense, last for shorter durations and less likely to be triggered by a particular stimulus or event. The Brief Mood Introspective Scale was used to measure mood in the pleasant-unpleasant spectrum. The study indicates that day-to-day changes in volatile measures of stock market index and exchange rate affect mood of the stakeholders. Also, the study attempts to illustrate loss aversion by showing that the displeasure accompanying unfavourable changes in NIFTY/exchange rate (adjusted for magnitude of change) was greater than the pleasure accompanying favourable changes in NIFTY/exchange rate (adjusted for magnitude change). Finally we present our conclusions to question the rationality of the mood variations of stock market investors.