Uncovering the Effect of News Signals on Daily Stock Market Performance: An Econometric Analysis-Reference-Cited by-同舟云学术

Uncovering the Effect of News Signals on Daily Stock Market Performance: An Econometric Analysis

Published:2023-08-04 Issue:3 Volume:11 Page:99
ISSN:2227-7072
Container-title:International Journal of Financial Studies
language:en
Short-container-title:IJFS

Author:

Raza Shahid¹^ORCID,Baiqing Sun¹,Kay-Khine Pwint¹^ORCID,Ali Kemal Muhammad²

Affiliation:

1. School of Management, Harbin Institute of Technology, Harbin 150001, China

2. SDGs Unit, Ministry of Planning, Development and Special Initiatives, Islamabad 44030, Pakistan

Abstract

The stock markets in developing countries are highly responsive to breaking news and events. Our research explores the impact of economic conditions, financial policies, and politics on the KSE-100 index through daily market news signals. Utilizing simple OLS regression and ARCH/GARCH regression methods, we determine the best model for analysis. The results reveal that political and global news has a significant impact on KSE-100 index. Blue chip stocks are considered safer investments, while short-term panic responses often overshadow rational decision-making in the stock market. Investors tend to quickly react to negative news, making them risk-averse. Our findings suggest that the ARCH/GARCH models are better at predicting stock market fluctuations compared to the simple OLS method.

Publisher

MDPI AG

Subject

Finance

Link

https://www.mdpi.com/2227-7072/11/3/99/pdf

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