Hasan, Dr. Syed Akif and Subhani, Dr. Muhammad Imtiaz (2011): Which Matters the Most for the Trading Index? (Law and Order or Weather Conditions). Published in: International Research Journal of Finance and Economics No. 72 (2011): pp. 46-51.
Download (115Kb) | Preview
Stock Markets are the indicators of economic activity taking place in an economy. There are multiple factors that can affect the performance of a Stock market. Besides the economical factors, the human behavior, the mood, willingness to pay and consumption patterns of people also plays an important role and affect the performance of a stock market. It has been empirically proven that human behavior is enormously and strongly influenced by the various weather conditions and law and order situation of the territory. This study investigates the effect of various weather conditions and law and order situation of Karachi on Karachi Stock Exchange trading volume. The daily data which includes various weather conditions, law and order situations of the city and the trading volume of Karachi Stock exchange for the period from January 1995 to December 2010 has been tested. The study found that there is a significant impact of law and order situation on Karachi Stock Exchange trading volume, and likewise, weather conditions also regulate the performance of Karachi Stock Exchange most often. Temperature is a very significant driving factor in impacting the trading volume of Karachi Stock Exchange whereas, Humidity and Sea Level Pressure also has a significant impact on KSE performance.
|Item Type:||MPRA Paper|
|Original Title:||Which Matters the Most for the Trading Index? (Law and Order or Weather Conditions)|
|English Title:||Which Matters the Most for the Trading Index? (Law and Order or Weather Conditions)|
|Keywords:||Trading Volume, Weather Conditions, Law and Order Situations, Karachi Stock exchange|
|Subjects:||G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing; Trading volume; Bond Interest Rates
A - General Economics and Teaching > A1 - General Economics
|Depositing User:||Muhammad Imtiaz Subhani|
|Date Deposited:||15. Nov 2011 16:11|
|Last Modified:||11. Feb 2013 12:19|
Chang, T. & Liu, W-C. (2008). Rational Bubbles in the Korea Stock Market? Further Evidence based on Nonlinear and Nonparametric Cointegration Tests. Economics Bulletin,3(34):1-12.
Dowling, M. & Lucey, B.,M. (2008). Mood and UK equity pricing. Applied Financial Economics Letters, 4:233-240.
Goetzmann, W.,N. & Zhu, N. (2002). Rain Or Shine: Where Is the Weather Effect? Yale ICF Working Paper No. 02-27, EFA 2003 Annual Conference Paper No. 304, September 2002.
Hirshleifer, D. & Shumway, T. (2001). Good Day Sunshine: Stock Returns and the Weather. Working paper, Ohio State University and SSRN.
Kang, S., H., Jiang Z., Lee, Y., & Yoon, S-M. (2010). Weather Effects on the Returns and Volatility of the Shanghai Stock Market. Physica A, 389:91-99 .
Loughran, T. & Schultz, P. (2003). Weather, Stock Returns, and the Impact of Localized Trading Behaviour. Journal of Financial and Quantitative Analysis, 6:49-72.
Murray, K., B., Muro, F., D., Finn, A., Leszczyc, P., P. (2010).The Effect of Weather on Consumer Spending. Journal Of Retailing and Consumer Services, 17(6): 512-520.
Pardo, A. & Valor, E. (2002). Spanish Stock Returns: Where is the Weather Effect?. European Financial Management, 9:1
Pardo, A. & Valor, E. (2003). Spanish Stock Returns: Rational or Weather Influenced. Working Paper, SSRN.
Saunders, E., M. (1993). Stock Prices and Wall Street Weather, American Economic Review, 83:1337-1345.
Subhani, M. I. & Osman, A. (2011a). Stock Market Reactions due to the announcements of Consumer Price Index and the Investigations of Endogeneity. Interdisciplinary Journal of Contemporary Research in Business, 3(1), 878-884.
Subhani, M., I. & Osman, A. (2011b). The Structure and performance of economy of Pakistan (Comparative study between democratic and non-democratic government). International Journal of Business and Social Science, 2(12), Forthcoming.
Symeonidis, L., Daskalakis, G. & Markellos, R., N. (2010). Does The Weather Affect Stock Market Volatility? Finance Research Letters, 7(4):214-223.
Tufan, E. & Hamarat, B. (2004). Do Cloudy Days Affect Stock Exchange Returns: Evidence From Istanbul Stock Exchange, Journal Of Naval Science And Engineering, 2(1), 117-126.
Zadorozhna, O. (2009). Does Weather Affect Stock Returns Across Emerging Markets? (Unpublished master’s Thesis). Kyiv School Of Economics, Kyiv, Ukraine.