Intraday analyses on weather-induced sentiment and stock market behavior

Sangik Seok, Hoon Cho and Doojin Ryu

The Quarterly Review of Economics and Finance, 2024, vol. 98, issue C

Abstract: We examine the intraday relationship between weather conditions and investor sentiment in the Korean equity market. By uncovering the intermediary role of weather-induced sentiment in affecting market variables, we suggest a potential link between weather conditions, sentiment, and market dynamics. High temperatures, humidity, and cloud coverage negatively affect investors’ moods, while strong winds and long sunshine durations have a positive impact. Although only cloud coverage marginally impacts stock returns, weather factors significantly affect market turnover, volatility, and illiquidity, especially when they alter sentiment dynamics.

Keywords: Emerging market; Intraday analysis; Investor sentiment; Stock market; Trading activity; Weather (search for similar items in EconPapers)
JEL-codes: G12 G14 G15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:98:y:2024:i:c:s1062976924001352

DOI: 10.1016/j.qref.2024.101929

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