Intensified geopolitical conflicts and herding behavior: An evidence from selected Nifty sectoral indices during India-China tensions in 2020
- Title
- Intensified geopolitical conflicts and herding behavior: An evidence from selected Nifty sectoral indices during India-China tensions in 2020
- Creator
- Krishna T.A.; Suresha B.
- Description
- The recent India-China geopolitical conflicts have presented enormous uncertainty to the investors in various sectoral indices of the Indian stock market. This empirical study aims to examine the impact of intensified India-China geopolitical conflicts 2020 on investors' herding behavior in the National Stock Exchange sectoral indices. The high-frequency data of three major NIFTY sectoral indices (Auto, Energy, and Pharma) are used in an intensified geopolitical event window to spot precisely the traces of the investors' herding behavior. Furthermore, multifractal detrended fluctuation analysis (MFDFA) is employed to obtain Hurst Exponent values (h(q)) for the NIFTY sectoral indices. The findings reveal that these NIFTY sectoral indices exhibited profound traces of herding behavior on the event day (t = 0) due to the heightened India-China geopolitical clashes. In addition, these indices depicted an overall higher level herding behavior with the (h(q)) values close to 0.72 throughout the intensified geopolitical event window. The study concludes that the sectors highly reliant on the Chinese supplies and with significant trade linkages with China depicted a higher level of herding behavior in their indices. Further, the presence of herding behavior in these sectoral indices is due to the operational and supply-chain risks posed by the geopolitical event. 2022 LLC CPC Business Perspectives. All rights reserved.
- Source
- Investment Management and Financial Innovations, Vol-19, No. 1, pp. 300-312.
- Date
- 2022-01-01
- Publisher
- LLC CPC Business Perspectives
- Subject
- event study; herding behavior; Hurst exponent; multifractal analysis; national stock exchange
- Coverage
- Krishna T.A., School of Business and Management, CHRIST, Deemed to be Univesity, India; Suresha B., School of Business and Management, CHRIST, Deemed to be Univesity, India
- Rights
- All Open Access; Gold Open Access
- Relation
- ISSN: 18104967
- Format
- Online
- Language
- English
- Type
- Article
Collection
Citation
Krishna T.A.; Suresha B., “Intensified geopolitical conflicts and herding behavior: An evidence from selected Nifty sectoral indices during India-China tensions in 2020,” CHRIST (Deemed To Be University) Institutional Repository, accessed February 27, 2025, https://archives.christuniversity.in/items/show/15397.