The Influence of Indonesian Investor Sentiment on Stock Returns Before and After the Issue of the Russian-Ukrainian War in Energy Sector Companies Listed on the IDX

Hadi Ahmad Sukardi (), Nugraha Nugraha, Imas Purnamasari, Maya Sari and Yayat Supriatna
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Hadi Ahmad Sukardi: Universitas Pendidikan Indonesia
Nugraha Nugraha: Universitas Pendidikan Indonesia
Imas Purnamasari: Universitas Pendidikan Indonesia
Maya Sari: Universitas Pendidikan Indonesia
Yayat Supriatna: Universitas Pendidikan Indonesia

A chapter in Proceedings of the 8th Global Conference on Business, Management, and Entrepreneurship (GCBME 2023), 2024, pp 14-23 from Springer

Abstract: Abstract The Russo-Ukrainian War and its subsequent geopolitical ramifications have wielded a substantial influence on market dynamics and industrial energy sectors in various countries, including Indonesia. This article delves into the intricacies of Indonesian investor sentiment and its correlation with stock returns within the energy sector, both pre and post the Russia-Ukraine war. The overarching objective of this study is to unravel the nuanced shifts in investor sentiment in the backdrop of this geopolitical strife and comprehend how these shifts reverberate throughout Indonesia’s energy sector. Several factors that are known to sway investor sentiment are scrutinized in this article. These encompass the volume of keyword searches on Google Trend, trading volume, consumer confidence indices, and mutual fund flows. The research findings unearth a negative impact of the volume of keyword searches linked to the Russia-Ukraine conflict on the stock returns of energy sector companies. Furthermore, trading volume is revealed to exert a positive influence on stock returns, while consumer confidence indices and mutual fund flows exhibit a favorable effect on the stock returns of energy sector companies. Against the backdrop of the Russian-Ukrainian war, investor sentiment emerges as a pivotal factor with the potential to significantly shape the stock prices and returns of companies operating in the energy sector. This study serves as a valuable resource for understanding the pivotal role of investor sentiment during geopolitical conflicts and its ripple effects on market dynamics within the energy sector. The insights garnered from this research can furnish both companies and investors with a foundational framework for making informed investment decisions and mitigating risks during periods of political and economic uncertainty.

Keywords: Consumer Confidence; Mutual Fund Flows; Investor Sentiment; Stock Return; Trading Volume (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-443-3_3

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