 Managing shareholders in turbulent times: evidence from Indian Stock MarketTimcy Sachdeva International Journal of Business and Globalisation, 2020, vol. 25, issue 3, 265-277 Abstract: Efficient-market hypothesis (EMH) theory is a well recognised postulation in financial economics. Changes in the stock prices during the turbulent times provide an opportunity to test the validity of EMH. Unexpected events such as stock market crashes, political events, earthquakes, terrorist attacks, etc. put more stress on the financial markets and efficiency fails to explain market anomalies, including speculative bubbles and excess volatility. In efficient market the stock prices are expected to behave differently in response to such events, as the new information will have different economic impact on individual firms as well as shareholders wealth. Contrary to rational expectations, market participants act irrationally in favour of potential arbitrage opportunities. This paper investigates the pricing behaviour of Indian Stock Market with the sudden changes in high denomination currency notes on shareholders wealth. Using event study methodology, the paper analyses the major political event that had strong economic implication on market participants. The results indicate insignificant negative abnormal returns to shareholders of Indian companies. Keywords: event study; efficient-market hypothesis; EMH; demonetisation; unexpected events; stock market. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbglo:v:25:y:2020:i:3:p:265-277 Access Statistics for this article More articles in International Journal of Business and Globalisation from Inderscience Enterprises Ltd |
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