EFFECT OF SOCIAL MEDIA ON NEPALESE FINANCIAL MARKETS

Abstract

This study investigates the Effect of Social Media on Nepalese Financial Markets by analyzing key factors such as Tweet, sentiment of tweets, reels and posts, trending YouTube content, and news mentions. With a dataset comprising responses from 389 participants, the research explores how these social media elements correlate with market movements. The study adopts a quantitative approach, utilizing tools such as frequency analysis, arithmetic mean, standard deviation, Pearson correlation, and regression analysis to examine the relationship between social media activity and financial markets. The results indicate a strong correlation between social media metrics and market trends, with factors like trending YouTube content and Tweet showing significant influence. A regression analysis reveals that these variables not only interrelate but also significantly affect financial markets, making social media a valuable predictive tool. The findings underscore the need for financial analysts and investors to integrate social media monitoring into their strategies, as shifts in online activity can provide early indications of market fluctuations. The study also presents policy implications, suggesting the importance of regulating social media's impact on market behavior.