Stock Market Instability and Investor Overreaction

Rosa Galvão – Polytechnic Institute of Setúbal, School of Business and Administration, Setúbal, Portugal

Rui Dias – ISG – Business & Economics School, CIGEST, Lisbon, Portugal; ESCAD – Polytechnic Institute of Lusophony, Lisbon, Portugal; Polytechnic Institute of Setúbal, School of Business and Administration, Setúbal, Portugal

Cristina Palma – Polytechnic Institute of Setúbal, School of Business and Administration, Setúbal, Portugal

Paulo Alexandre – Polytechnic Institute of Setúbal, School of Business and Administration, Setúbal, Portugal

Sidalina Gonçalves – Polytechnic Institute of Setúbal, School of Business and Administration, Setúbal, Portugal

Abstract: Given the events in 2022, characterised by Russia’s invasion of Ukraine, the financial markets were affected by a spiral of mistrust and overreactions in various geographies. The primary objective of this study is to evaluate the serial autocorrelation of stock prices on the capital mar­kets of Slovakia (SAX 16), Hungary (BUX), Russia (MOEX), the Czech Repub­lic (PRAGUE SE PX) and Slovenia (SBI TOP), during the period from 24 Feb­ruary 2022 to 23 November 2023, encompassing the Russian invasion of Ukraine in 2022. In the Hungarian (BUX) and Slovakian (SAX 16) markets, price movements are not random but influenced by their historical prices, suggesting investor overreactions to new information. On the other hand, in the markets, Russia (MOEX), the Czech Republic (PRAGUE SE PX) and Slo­venia (SBI TOP), price movements show a positive correlation with their his­tories, indicating more predictable patterns in investor behaviour.

8th International Scientific Conference – EMAN 2024 – Economics and Management: How to Cope With Disrupted Times, Rome, Italy, March 21, 2024, CONFERENCE PROCEEDINGS, published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-83-7, ISSN 2683-4510, DOI: https://doi.org/10.31410/EMAN.2024

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission. 

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