Indian Stock Market Reaction to the Quarterly Earnings Information

Iqbal and T. Mallikarjunappa (2009). “Indian Stock Market Reaction to the Quarterly Earnings Information”, Indian Journal of Finance, Vol.3, No.7, July, pp.43-50.

Posted: 8 Jan 2020

Date Written: July 7, 2009

Abstract

This paper examines stock market reaction to the earnings announcements by taking December 2001 quarter earnings announcement as an event. The study is based on 152 companies having minimum 20 percent foreign holdings. The companies are divided into, good news, bad news and overall portfolios. We have used event study methodology, t test, Runs test, sign test, raw returns and log returns. The behaviour of AARs and CAARs are examined for 30 days before and 31 days after the announcement of quarterly earnings. The results of the study revealed that Indian stock market reaction to the quarterly earnings announcements is slow and stock market is not semi strong form of efficient. The quarterly earnings announcement information can be used by the investors to earn abnormal profits in the Indian stock market.

Keywords: Efficient Market Hypothesis theory (EMH), excess return, Cumulative Average Abnormal Returns, quarterly earnings announcements, Indian stock market, Semi-strong from of EMH, Indian stock market response to earnings information

JEL Classification: G13, G14, G15, G18, C32, F30

Suggested Citation

Hawaldar, Iqbal Thonse and Mallikarjunappa, T., Indian Stock Market Reaction to the Quarterly Earnings Information (July 7, 2009). Iqbal and T. Mallikarjunappa (2009). “Indian Stock Market Reaction to the Quarterly Earnings Information”, Indian Journal of Finance, Vol.3, No.7, July, pp.43-50. . Available at SSRN: https://ssrn.com/abstract=3515496

Iqbal Thonse Hawaldar (Contact Author)

Kingdom University ( email )

Sanad
Bahrain

T. Mallikarjunappa

Mangalore University ( email )

Mangalagangotri
Mangalore - Dakshina Kannada
Mangalagangothri - 574 119, D.K. Karnataka 574199
India

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