TESTING THE RELATIONSHIP BETWEEN SERVICE CONFIDENCE INDEX AND STOCK MARKET: A CASE STUDY IN BORSA ISTANBUL

Investor sentiment, which reflects beliefs about future cash flows and investment risk, is an important consideration in financial decisions. In this study, effect of the service confidence index on Borsa Istanbul transportation index was examined. According to the Johansen cointegration test performed, the cointegration relationship representing the long term relationship was determined between the service confidence index and the Borsa Istanbul transportation index. Accordingly, the degree of long-term relationship between the variables has been determined by the normalized cointegration equation, and a 1% increase in the service confidence index provides a 31,7% increase in the Borsa İstanbul transportation index. It has been determined that the findings obtained in the study in terms of the effects of confidence indices on stock returns are in parallel with the literature (Jiang and Jin, 2020; Kaya, 2020; Gökalp, 2019; Eyüboğlu and Eyüboğlu, 2018; Köse and Akkaya, 2016; Usul, Küçüksille and Karaoğlan, 2017; Canöz, 2018; Hsu, Lin and Wu, 2011; Chen, 2011; Oprea and Brad, 2014; Olgaç and Temizel, 2008; Kandır, 2006; Korkmaz and Çevik, 2009; Aydoğan and Vardar, 2015; Jansen and Nahusis, 2003). In this context, it is considered that stock investors can benefit from confidence indices in their investment decisions.