Market Efficiency and the Impact of News Announcements on the Indian Stock Market

Abstract

Dealing in stock market requires an understanding of its VUCA characteristics, which are Volatility, Uncertainty, Complexity, and Ambiguity. This gives rise to many theories to explain these characteristics and their impacts on the stock market. One such theory is Efficiency Market Hypothesis (EMH), which challenges the methods of fundamental and technical analysis. The issue of “efficiency in the market” and how the “events in the news” influence the stock prices is still under discussion. By analysing the link between “events in the news” and stock price” movements in an “Indian context”, this project aims to contribute to this debate by analysing various situations with different variables namely, in the case of political events, and to understand the questions on the efficiency of the market as it is argued that the inefficiency in market may exist due to many reasons, like lack of buyers and sellers, human emotions and biases, etc