Title: The reflection of crowd behaviour in Indian bourses

Authors: R. Ganesh; G. Naresh; S. Thiyagarajan

Addresses: Department of Commerce and Management Studies, St. Mary's College, Kuppadi P.O. Sulthan Bathery, Wayanad 673592, India ' Department of Accounting and Finance, Charlton College of Business, University of Massachusetts Dartmouth, 285, Old Westport Road, North Dartmouth, MA 027472300, USA ' Department of International Business, School of Management, Pondicherry University, Puducherry 605014, India

Abstract: Behaviour of investors in stock market continues to be a topic of study for many researchers. When faced with complex situations, investors often rely on mental shortcuts and end up in a biased decision. Of all irrational behaviours, 'herding' is considered as one of the most significant one. The present study aims to identify the presence of herding in Indian stock market during the period 1st April 2005 to 31st March 2015, by taking Sensex as market index and the sectoral indices of BSE. Result shows that there was no indication of herding during the global crisis period of 2007-2008, but market showed the presence of herding during the volatile period of 2011-2012 and to some extent during 2014-2015 period. Overall, the result of the study is an indication of great resilience and rationality of Indian market.

Keywords: bias; CSAD; cross-sectional absolute deviation of returns; herding; sectoral indices; Sensex.

DOI: 10.1504/IJBAF.2017.086408

International Journal of Behavioural Accounting and Finance, 2017 Vol.6 No.2, pp.93 - 106

Received: 03 Feb 2016
Accepted: 21 Nov 2016

Published online: 10 Sep 2017 *

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