Political risk, fear, and herding on the Brazilian stock exchange

“…Sub-prime crisis or COVID-19: A comparative analysis of profitability and lagged decision-making lead to the occurrence of such phenomena. The Indian stock market also became a victim of herding behaviour, which is in sync with many Indian and foreign authors' findings in their respective studied stock markets Espinosa-méndez, et al, 2020;Raimundo Júnior, et al, 2020;Talwar, et al, 2021) have found the presence of herding during the adverse situation and Covid-19.…”

Section: Covidsupporting

confidence: 66%

Existence of Herding Behaviour in the Indian Stock Market: An Empirical Analysis During the COVID-19 Period

Prakash,

Padmasree,

Kashyap

2024

SDMIMD

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The current study focuses on herding behaviour that occurred in the “Indian Stock Market (ISM)” between 2011 and during the time of the Covid-19 pandemic. The study examines the closing price of the NSE benchmark Nifty and 33 companies from three sectoral indices selected out of fifteen available on a daily basis. The sectors are the Auto sector, Nifty Bank, and IT sector, from 1 January 2011 to 31 December 2020. Christie and Huang (1995) suggested the CSSD and Chang, et al. (2000) suggested the CSAD models to study the existence of herding behavior during the Covid-19 period. Findings based on the daily closing price reveal that for the ten-year data, no significant herding is present in the market, whereas Covid-19 had caused herding during the rising (up) and falling (down) market. The calculated herding period during the Covid-19 timeframe is from 11 March 2020 to 31 December 2020. The study found no herding between 1st January 2011 to 31 December 2019 in the ISM. The herding was evident during the Covid-19 time frame, possibly due to emotional biases, fear, and uncertainty of the pandemic. The study will be helpful to investors, decision-makers, and market regulators in decisionmaking in the capital market. It will also facilitate brokers and market participants to prepare different trading strategies to be successful in regular times and times of adversity.

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“…In the Brazilian stock market, Raimundo Júnior et al. (2020) detected high herding with slight differences in the market index between listed and unlisted companies.…”

Section: Literature Reviewmentioning

confidence: 96%

Herding and Google search queries in the Brazilian stock market

Carvalho,

Jordão da Gama Silva,

Klotzle

2023

RBF

Self Cite

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PurposeThis study investigates the presence of herding in the Brazilian stock market between 2012 and 2020 and associates it with the volume of searches on the Google platform.Design/methodology/approachFollowing methodologies are used to investigate the presence of herding: the Cross-Sectional Standard Deviation of Returns (CSSD), the Cross-Sectional Absolute Deviation (CSAD) and the Cross-Sectional Deviation of Asset Betas to the Market.FindingsMost of the models detected herding. In addition, there was a causal relationship between peaks in Google search volumes and the incidence of herding across the whole period, especially in 2015 and 2019.Originality/valueThis study suggests that confirmation bias influences investors' decisions to buy or sell assets.

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Political risk, fear, and herding on the Brazilian stock exchange

Cited by 9 publications

References 9 publications

Covid-19 and herding in global equity markets

Covid-19 and herding in global equity markets

Existence of Herding Behaviour in the Indian Stock Market: An Empirical Analysis During the COVID-19 Period

Herding and Google search queries in the Brazilian stock market

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