Title: No breather for stock market as SVB crisis weighs on sentiment: an event analysis on market returns in the USA

Authors: Anil Kumar Mohanty; Anup Kumar Roy

Addresses: Department of Commerce, Khallikote Unitary University, Berhampur-760001, Ganjam, Odisha, India ' Department of Commerce, Guru Ghasidas Vishwavidyalaya, Bilaspur, Chhattisgarh-495009, India

Abstract: The paper examines the short-term sectoral abnormal return reaction of the Nasdaq sectoral stock market in the USA to the announcement of Silicon Valley Bank collapses. The study took place on 10 March 2023 as an event day. By employing a market model with parametric and non-parametric tests, the empirical analysis found that the abnormal return of the sectors like banking and finance had been hardly affected during the event window period while the abnormal return of the sectors like industrial, telecommunication, transport, insurance, and biotechnology had been slightly affected. Still, the speed of the adjustment is very high. The parametric and non-parametric results found no significant impact of the information on market return on an overall basis. In contrast, we found a highly significant result in the banking and finance sector stocks because the information is related to the collapse of the banking sector.

Keywords: US bank collapse; sectoral indices; market model; event study; market information; abnormal return; USA.

DOI: 10.1504/IJFMD.2025.151610

International Journal of Financial Markets and Derivatives, 2025 Vol.10 No.2, pp.111 - 128

Received: 28 Dec 2023
Accepted: 13 Oct 2024
Published online: 10 Feb 2026 *

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