Hedge fund uses Twitter to predict public mood

Twitter, the micro-blogging site which boasted 100 million active users last week, will be used by a British hedge fund to predict whether share prices will rise or fall.

According to The Sunday Times, tweets will be analysed using computer algorithms to predict stock market movement by assessing the public’s mood.

The programme will access whether people are happy, sad, anxious or tired in a bid to predict the market.

Derwent Capital Markets in Mayfair launched a £25 million fund that bets on the findings. It launched in May and made a return of 1.57% at the end of July – its first full trading month.