Examining the Short-Term Impact of Indian Cricket Match Results on the National Stock Market

Abstract

In this paper, we investigate the impact of cricket match results on stock market returns in India. Our hypothesis is that cricket results have an impact on investor sentiment, which is translated to abnormal stock market returns. Examining data from 1994-2018, we find that there is almost no significant positive impact of a cricket win on stock market returns. While there is no significant negative impact of a single loss on the stock market, we find that when there are two consecutive losses before a trading day, returns are significantly lower than normal. Our supplementary analyses reveal that when India loses to a higher-ranked team, or when India is eliminated from the ICC Cricket World Cup, market returns are significantly lower than normal.