The Impact of Business and Political News on the GCC Stock Markets

Al-Maadid, Alanoud; Caporale, Guglielmo Maria; Spagnolo, Fabio; Spagnolo, Nicola

The Impact of Business and Political News on the GCC Stock Markets

33 Pages Posted: 21 Feb 2019

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute); German Institute for Economic Research (DIW Berlin)

Fabio Spagnolo

Brunel University London - Economics and Finance

Nicola Spagnolo

Brunel University London - Economics and Finance

Date Written: 2018

Abstract

This paper investigates the impact of business and political news on stock market returns in the Gulf Cooperation Council (GCC) countries. For this purpose, it employs a Markov switching model including a separate index for each of the two categories of news considered. The results indicate the importance of news as drivers of GCC stock returns, with business news playing a more substantial role; further, news released in the largest financial markets in the regions are found to have significant cross-border effects.

Keywords: business news, GCC countries, Markov switching model, political news

JEL Classification: C320, F360, G150

Suggested Citation: Suggested Citation

Al-Maadid, Alanoud and Caporale, Guglielmo Maria and Spagnolo, Fabio and Spagnolo, Nicola, The Impact of Business and Political News on the GCC Stock Markets (2018). CESifo Working Paper No. 7353. Available at SSRN: https://ssrn.com/abstract=3338680