Stock Market Instability and Investor Overreaction
Stock Market Instability and Investor Overreaction

Author(s): Rosa Galvão, Rui Dias, Cristina Palma, Paulo Alexandre, Sidalina Gonçalves
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Overreaction; Serial autocorrelation; Central and Eastern Europe
Summary/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.

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