``There are forces influencing our economies that have little to do with rational thought.'' Stock markets decline 0.39 percent on average after the national team loses in a World Cup game and 0.29 percent in any international match.
The World Cup will kick off in June 2006.
Soccer Results Affect Stocks, Dartmouth Study Shows (Update1)
Oct. 28 (Bloomberg) -- Stock markets move with soccer scores because they have a ``decisive impact'' on the mood of a nation, according to a study by Dartmouth College.
Match results may ``have an important effect'' on share prices, Professor Diego Garcia said, commenting on a report released this week by Hanover, New Hampshire-based Dartmouth, a member of the Ivy League. ``There are forces influencing our economies that have little to do with rational thought.''
Stock markets decline 0.39 percent on average after the national team loses in a World Cup game and 0.29 percent in any international match, according to the study, co-written by Massachusetts Institute of Technology's Alex Edmans and Norwegian School of Management's Oyvind Norli.
The correlation is the highest in countries with the biggest public support for soccer such as England, France, Germany, Italy and Spain, the report from Dartmouth's Tuck School of Business said. In South American nations, the phenomenon is similar, it said.
The U.K.'s FTSE 100 Index, which tracks shares of the country's biggest companies, fell 0.5 percent on Oct. 13. A day earlier, England, which has the biggest population in the nation, lost 1-0 to Northern Ireland in a qualifying game for the World Cup in Germany next year. Northern Ireland is also part of the U.K.
Argentina's Merval index slipped 0.5 percent on June 30, a day after the national team lost 4-1 to Brazil, the World Cup holders, in the final of the Confederations Cup.
Soccer ``may have an effect on the market since it affects sentiment,'' Richard Hunter, head of U.K. equities at Hargreaves Lansdown in Bristol, England, said in a telephone interview today. ``Psychology is pervasive in markets.''
Still, there's no evidence to show that stock markets rise when teams win, the study said. |
