The effect of weather on the European stock market

Sariannidis, Nikolaos; Giannarakis, Grigoris; Partalidou, Xanthi

doi:10.1108/ijse-04-2015-0079

Cited by 16 publications

(7 citation statements)

References 57 publications

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“…Exchange rate, forex reserve, current account balance and oil price effect selectively to these sectors. Sariannidis et al (2016) examined the reaction of stock market in Europe due to change in weather condition and found that it has affected DJSI (Dow Jones Sustainability Indices) Europe positively. Sayim and Rahman (2015), Yao et al (2017) analyzed that investor sentiment index has a positive relation with the Turkish stock and Shanghai Composite Index, respectively.…”

Section: Gold Price and Stock Market Movement In Various Countriesmentioning

confidence: 99%

“…A study using environmental variables might be interesting as these variables can affect the stock returns, and it has been recommended by Sariannidis et al (2016). According to Haron and Ayojimi (2019a), the country in which GST is implemented can see the effect, and India did so in 2017.…”

Section: Research Gap Identified In the Indian Context From The Existing Literaturementioning

confidence: 99%

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Impact of macroeconomic variables on the performance of stock exchange: a systematic review

Verma

Bansal

2021

IJOEM

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PurposeThis paper aims to identify various macroeconomic variables that affect the stock market performance of developed and emerging economies. It also investigates the effect of these factors on the stock markets of both economies. The impact of these variables on broad market indices and sectoral indices is investigated and compared too.Design/methodology/approachThe publications for the study were retrieved from databases such as Emerald Insight, EBSCO, ScienceDirect and JSTOR using the keywords “Macroeconomic variables” and “Stock market” or “Stock market performance.” The result demonstrated a growing corpus of scholarly work in the domain of stock market. The study was carried out separately for each macroeconomic indicator. Given a large number of articles under consideration, the authors began by reading the titles and abstracts of all publications to identify those that were relevant. The papers are evaluated in Excel and the articles for review range from 1972 to 2021.FindingsThe authors found that gross domestic product (GDP), FDI (Foreign Direct Investment) and FII (Foreign Institutional Investment) have a positive effect on both emerging and developed economies’ stock market while gold price has a negative effect. Interest rates had a negative impact on both economies except for a few developing countries. The relationship with oil prices was positive for oil exporting countries while negative for oil importing countries. Inflation, money supply and GDP are the macroeconomic variables that have the same effect on sectoral indices as they do on broad market indices. The impact was sector-specific for the remaining variables.Research limitations/implicationsThis paper gives an overview of relation and effect covering variety of macroeconomic variables and stock market indices. Still, there is a scope for further research to analyze the effect on thematic, strategy and sectoral indices. A longer time horizon with new variables, such as bank deposit growth rate, nonperforming assets of banks, consumer confidence index and investor sentiment, can be studied using high-frequency data. This research may help stakeholders adopt and manage their policies during a crisis or economic slump.Practical implicationsThis study will assist investors, researchers and educators in the fields of economics and finance in understanding how macroeconomic factors affect the stock market. Furthermore, this study can guide in portfolio diversification strategy across multiple sectors by examining the impact of macroeconomic factors specific to sectoral indices. This paper provides insight into society and researchers since it integrates a number of macroeconomic variables and their interaction with the stock market. It may also help pension funds and mutual fund firms to hedge their funds and allocate equity portfolios.Originality/valueWith respect to India, this study looked at new macroeconomic variables and sectors. It contrasted the impact of these variables in developed and developing economies. The effect of broad and sectoral stock indexes was also investigated and compared. The authors examined how these variables responded during crisis and economic downturns by using articles from a longer time frame. This research also looked into how changing the frequency of data for the variables altered stock performance. This paper emphasized the need for more research into thematic, strategy and broad market indices, such as small-cap and mid-cap indices.

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Section: Gold Price and Stock Market Movement In Various Countriesmentioning

confidence: 99%

Section: Research Gap Identified In the Indian Context From The Existing Literaturementioning

confidence: 99%

Impact of macroeconomic variables on the performance of stock exchange: a systematic review

Verma

Bansal

2021

IJOEM

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“…The behavioral paradigm, on the other hand, draws on the psychological literature dating back to the 1970s, which demonstrates that the weather affects human behavior 4. More importantly, for our purposes, investor sentiment―and thus financial markets―can be influenced by weather‐related factors such as sunshine and cloud coverage (Bassi et al., 2013; Hirshleifer & Shumway, 2003; Saunders, 1993), wind speed (Keef & Roush, 2002), humidity (Sariannidis et al., 2016), precipitation (Kaustia & Rantapuska, 2016) and air temperature (Bansal & Ochoa, 2011; Cao & Wei, 2005a; Floros, 2011; Keef & Roush, 2007; Peillex et al., 2021; Yan et al., 2022).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Air temperature and sovereign bond returns

Kizys,

Rouatbi,

Umar

et al. 2024

Financial Market

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The relationship between air temperature and sovereign bond returns is founded on competing paradigms: macroeconomic, behavioral and energy demand‐based. Which of these theoretical mechanisms receives support from data? To answer this, we examined four decades of bond data from 31 countries. Overall, daily temperature positively affects government bond returns. A 10°F rise leads to an increase in sovereign bond returns between 0.22 and 0.85 basis points. We also document evidence of asymmetric and nonlinear price responses to both temperature levels and shocks. Our results survive a battery of robustness checks and lend support to the macroeconomic and behavioral paradigms, albeit not the energy demand‐based view.

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“…The crude oil commodity does have an unfavourable image when investing in the sustainable index [41]. Therefore, an increase in crude oil prices will lead to a decrease in the value of the sustainable index employed [42]. Crude oil volatility will cause shocks to global industries, including in Southeast Asia, which in turn will disrupt the economy [43].…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Impact of FED Rate and Energy Commodity Price on ASEAN Sustainable Stock Returns

Kumajas,

Saerang,

Gamaliel

et al. 2024

IJSDP

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Sustainable stocks have been associated with low risk and low returns but can be a good longterm investment portfolio option. After COVID-19 and the Russia-Ukraine conflict, the global economy has been destabilized, leading to an increase in the FED rate and energy commodity prices, such as crude oil and crude palm oil (CPO). This study aims to examine the impact of these indicators on the returns of sustainable stock indexes in emerging markets such as ASEAN, specifically the member of ASEAN who have sustainable stock indexes i.e. Indonesia, Malaysia, Singapore and Thailand. Based on 475 research data, the study finds that crude oil and CPO prices have no significant effect on sustainable stock returns. In contrast, the FED rate has a significant negative effect on sustainable stock returns. Sustainable stocks appear to be resilient to crude oil and CPO price volatility, except for the FED rate. Therefore, investors may be less concerned about energy commodity price volatility in the post-COVID-19 period. However, investors seem more interested in shifting their investments to bank products with higher profit opportunities due to the FED rate increase and minimal risk.

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The effect of weather on the European stock market

Cited by 16 publications

References 57 publications

Impact of macroeconomic variables on the performance of stock exchange: a systematic review

Impact of macroeconomic variables on the performance of stock exchange: a systematic review

Air temperature and sovereign bond returns

Impact of FED Rate and Energy Commodity Price on ASEAN Sustainable Stock Returns

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