Abstract
Stock market movements are the results of changes in investor sentiment (INSEN) which can even be induced by non-economic events. We consider international cricket events to empirically investigate the notions. Implementing portfolio approach, we conduct the event study along with OLS regression model to quantify empirically the effects of sports event outcomes (SEOs) on investor sentiment stimulation and stock market movements. Our investigation finds abnormal returns in the event windows [-2; +2]. Additionally, constructing a market-based sentiment index, we explore whether the market abnormalities are the true effects of SEOs. The results elucidate the significant stimulus of INSEN as a mediator to push the market returns up when BCT teams won the matches, but report the mixed phenomena in case of lost games. These findings not only unveil new aspects to the regulatory authorities to control the illegal market making in small markets but also contribute the literature with extensions of learning investor reactions to the major events.
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