COVID-19 effect on the herding behaviour in the Indian stock market

Vikas Pandey and Shaurya Singh

Global Business and Economics Review, 2024, vol. 30, issue 3, 348-358

Abstract: Investor psychology has often argued that subconscious factors play a crucial role in our decisions. One such factor is the herding behaviour of investors in stock markets. This paper attempts to analyse the presence of herding in the Indian stock market during the COVID-19 pandemic. The paper uses the CNX Nifty 50 Index, which consists of the 50 largest Indian companies listed on the National Stock Exchange (NSE). The paper uses the cross-sectional absolute deviation (CSAD) to analyse the presence of herding. The results obtained from the study indicate the presence of herding during the period of COVID-19 in the Indian stock market, more so during the market downturn. Herding behaviour is more prominent during the first wave of COVID-19 than in the second one. During the pandemic, investors' fear and market uncertainty can lead to herding behaviour. This study gives insight into the effect of COVID-19 on the Indian stock market.

Keywords: herding behaviour; COVID-19; Indian stock market; cross-sectional absolute deviation; CSAD. (search for similar items in EconPapers)
Date: 2024
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