Abstract
We analyse the reaction of the New Zealand stock market to five economically-neutral events that psychology research indicates have varying degrees of influence on emotion and mood. Only one of these events is associated with mean or median returns that are statistically different from those on non-event days, and even this disappears when the influence of the United States market is taken into account. However, several events offer returns that differ from those on non-event days in an economically significant manner. Moreover, the variance of returns for event days is typically much greater than the variance for non-event days. Contrary to what theory would suggest, the market's propensity to react to economically-neutral events is largely independent of the mid-1980's market reforms.
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