Herd Behavior in Indian Stock Market During Extreme Volatility and Covid-19 Pandemic

The present study examines the evidence of herd behavior of investors in the Indian stock market during extreme volatility, i.e., bulí and bear phases. It also investigates the herd behavior during the first and second waves of the Covid-19 pandemic. A sample of 50 companies listed on NSE during January 2019 to December 2021 is considered for the study, employing the methods developed by Christie and Huang (1995) and Chang et al. (2000). The findings present evidence of herd behavior during the first wave of the pandemic, while there is no evidence of such behavior during the second wave. Further, the study concludes that investors mimic the investment behavior of others in an extreme high return period only. There is no indication of herd behavior in extreme low return period and in the whole sample period.

Covid-19 Lockdown and Its Effect on BSE Indexes: An Event Study

This paper scrutinizes the Indian stock market performance after the central government's announcement of lockdown on March 22,2020 due to the Covid-19 pandemic. The lockdown had different impacts on varied sectors which were considered for the study, namely, banking, oil and gas, healthcare, capital goods, Fast Moving Consumer Durables (FMCD), and small-cap and mid-cap segments. The data was collected from BSE indexes, and an event study with estimation window from May 14, 2019 to March 5, 2020, a period of 201 market working days, was considered. The findings reveal that small-cap, mid-cap, FMCD and healthcare sectors were most impacted by the nationwide lockdown and thus had abnormal returns, while the impact on other sectors like banking, oil and gas, and capital goods was not significant.