Cargando…

Overconfidence bias in the Indian stock market in diverse market situations: an empirical study

Market situations affect investors’ sentiments. Sudden and sharp changes in the market may make investors adjust their beliefs and change their viewpoints. To quote, such sharp changes include the stock market crash of 2008 and the COVID-19 pandemic, which significantly impacted investors' emot...

Descripción completa

Detalles Bibliográficos
Autores principales: Kumar, Jitender, Prince, Neha
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer India 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9649013/
http://dx.doi.org/10.1007/s13198-022-01792-1
_version_ 1784827707680358400
author Kumar, Jitender
Prince, Neha
author_facet Kumar, Jitender
Prince, Neha
author_sort Kumar, Jitender
collection PubMed
description Market situations affect investors’ sentiments. Sudden and sharp changes in the market may make investors adjust their beliefs and change their viewpoints. To quote, such sharp changes include the stock market crash of 2008 and the COVID-19 pandemic, which significantly impacted investors' emotions. In this direction, this study attempts to find investors’ overconfidence bias in different market situations, i.e., precrash period (2006–2008), crash period (2008–2010), and post-crash period (2010–2015, 2015–2020, 2020–2021). We have obtained secondary data for this study from the BSE 100 index (as a proxy of the Indian stock market). Econometric techniques used for data analysis include Vector Auto Regression (VAR), Granger causality VAR/Block Exogeneity Wald Test, and Impulse Response Function (IRF). The study finds that the investors were overconfident during pre-crash periods, i.e., before the global market crash of 2008 and the duration between 2015 and March 2020. In postcrash periods, i.e., during 2008–2010, 2010–2015, and 2020–2021, investors were not overconfident.
format Online
Article
Text
id pubmed-9649013
institution National Center for Biotechnology Information
language English
publishDate 2022
publisher Springer India
record_format MEDLINE/PubMed
spelling pubmed-96490132022-11-14 Overconfidence bias in the Indian stock market in diverse market situations: an empirical study Kumar, Jitender Prince, Neha Int J Syst Assur Eng Manag Original Article Market situations affect investors’ sentiments. Sudden and sharp changes in the market may make investors adjust their beliefs and change their viewpoints. To quote, such sharp changes include the stock market crash of 2008 and the COVID-19 pandemic, which significantly impacted investors' emotions. In this direction, this study attempts to find investors’ overconfidence bias in different market situations, i.e., precrash period (2006–2008), crash period (2008–2010), and post-crash period (2010–2015, 2015–2020, 2020–2021). We have obtained secondary data for this study from the BSE 100 index (as a proxy of the Indian stock market). Econometric techniques used for data analysis include Vector Auto Regression (VAR), Granger causality VAR/Block Exogeneity Wald Test, and Impulse Response Function (IRF). The study finds that the investors were overconfident during pre-crash periods, i.e., before the global market crash of 2008 and the duration between 2015 and March 2020. In postcrash periods, i.e., during 2008–2010, 2010–2015, and 2020–2021, investors were not overconfident. Springer India 2022-11-10 2022 /pmc/articles/PMC9649013/ http://dx.doi.org/10.1007/s13198-022-01792-1 Text en © The Author(s) under exclusive licence to The Society for Reliability Engineering, Quality and Operations Management (SREQOM), India and The Division of Operation and Maintenance, Lulea University of Technology, Sweden 2022, Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law. This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Original Article
Kumar, Jitender
Prince, Neha
Overconfidence bias in the Indian stock market in diverse market situations: an empirical study
title Overconfidence bias in the Indian stock market in diverse market situations: an empirical study
title_full Overconfidence bias in the Indian stock market in diverse market situations: an empirical study
title_fullStr Overconfidence bias in the Indian stock market in diverse market situations: an empirical study
title_full_unstemmed Overconfidence bias in the Indian stock market in diverse market situations: an empirical study
title_short Overconfidence bias in the Indian stock market in diverse market situations: an empirical study
title_sort overconfidence bias in the indian stock market in diverse market situations: an empirical study
topic Original Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9649013/
http://dx.doi.org/10.1007/s13198-022-01792-1
work_keys_str_mv AT kumarjitender overconfidencebiasintheindianstockmarketindiversemarketsituationsanempiricalstudy
AT princeneha overconfidencebiasintheindianstockmarketindiversemarketsituationsanempiricalstudy