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A Perspective on Industry Classification and Market Reaction to Corporate News: Evidence from India

Author

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  • Bhattacharjee Nayanjyoti

    (Department of Management Studies, National Institute of Technology, Durgapur, West Bengal, India (PhD candidate); Department of Management Studies, Bodoland University, Kokrajhar, Assam, India (Assistant Professor))

  • De Anupam

    (Department of Management Studies, National Institute of Technology, Durgapur, West Bengal, India (Assistant Professor))

Abstract

In this paper, we provide a cross-industry perspective on the market reaction to different corporate news in the context of Indian stock market. We have studied the price and volume movements associated with eight broadly defined news categories namely Analyst Calls, Earnings, Earnings Forecasts, Finance, Legal and Regulatory, Management, Operations and Restructuring. We have employed the standard event study methodology on a sample of stocks listed on the National Stock Exchange of India for the purpose of our study. We observe that the market reaction to firm specific corporate news varies according to the type of news across different industry groups. We also observe that the sentiment of the news is a critical factor which influences the market reaction to such news flow across industry groups. We also provide a cross-industry perspective on the relative importance of different corporate news categories after taking into account the sentiment of the news in the context of Indian stock market.

Suggested Citation

  • Bhattacharjee Nayanjyoti & De Anupam, 2018. "A Perspective on Industry Classification and Market Reaction to Corporate News: Evidence from India," Scientific Annals of Economics and Business, Sciendo, vol. 65(1), pages 31-50, March.
    • Handle: RePEc:vrs:aicuec:v:65:y:2018:i:1:p:31-50:n:1
    DOI: 10.2478/saeb-2018-0001
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    More about this item

    Keywords

    corporate news; event study; industry classification; abnormal return; trading volume;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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