INVESTORS’ HERDING BEHAVIOUR IN INDIAN STOCK MARKETS DURING COVID 19: A CSSD AND CSAD APPROACH

Abstract

The World has witnessed one of the most severe crises, a resulting effect of COVID 19 virus. This virus was never seen before in the human history and was declared as Pandemic by World Health Organization (WHO) on 11th March, 2020. Any crises like situation creates an imbalance in the economy which also gets penetrated in the stock markets of the country. The investors sentiments get weakened due to the negative impact of such incidences on various aspects of economy. Investors tend to exit from the market in such situation and look forward for better investment options or cash liquidity. Nevertheless, investors depict such behaviour in groups and herding tend to be me prevalent during such period of market stress (Bouri et al. 2021). Therefore, the present research tries to explore the herding behaviour of investors in Indian stock market. The study examines the presence of herding possibilities in Nifty 50 stocks of Indian stock market during the phase of Covid 19. The Cross-Sectional Standard Deviation (CSSD) methodology proposed by Christie and Huang (1995) and Cross-Sectional Absolute Deviation (CSAD) suggested by Chang et al. (2000) has been applied to detect the herding effect on stock prices of 50 composite stock of Nifty 50 index of Indian Stock Market.