Behavioral Bias of Equity Investors in Different Market Conditions and Events in Pakistan Stock Exchange (PSX)
Journal Title: UNKNOWN - Year 2024, Vol 5, Issue 1
Abstract
The herding behavior of equity investors in the Pakistan Stock Exchange (PSX) is examined in this study. There are two ways to look at herding behavior: first, in different market conditions, like bull and bear, extreme and less extreme, high and low trading volume, and high and low volatility; second, in different events, like the month of Ramadan, the financial crisis of 2007–2008, and the Covid-19 pandemic. Financial herding behaviour is when equity investors follow the actions of other equity investors without making their own decisions because they lack information or they think others have more trustworthy information. Regression analysis using Newey West Consistent Estimators is performed on Pakistan Stock Exchange (PSX) daily stock market data ranging from January 2001 to June 2021. The study found that the herding behavior among equity investors is absent during extreme market conditions, less extreme market conditions, high trading volume, high market volatility, and low market volatility; however, it is present during low trading volume, the month of Ramadan, financial crisis (2007-2008) and during Covid-19 pandemic as well.
Authors and Affiliations
Muhammad Afzal Abdul Rasheed Waleed Khalid
Keywords
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- EP ID EP733540
- DOI 10.55737/qjssh.379018319
- Views 30
- Downloads 0
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