Investor sentiments and stock returns

Abstract

This thesis investigates the stock market reaction to the results of football matches in Argentina, Brazil, England, France, Germany and Spain. The goal of this thesis is to further add on to existing theory of mood variables and the stock market. Two approaches within event study methodology have been used to capture potential effects and a significant decline in the stock market after losses before the financial crisis were found. Some of the findings are also robust to methodological changes, where we first adjust the returns for volatility and secondly, for asymmetric shocks in volatility. Therefore, it is concluded that stock markets were affected by football sentiments before the financial crisis. The stock market is not affected by football sentiments after the financial crisis.