According to one study, the results of big sports competitions also affect the stock market. It is believed that the reason is that such results change the mood of investors. For example, a defeat in a big soccer tournament could reduce stock prices on subsequent trading days by an average of 0.5%. These effects are evident in other sports, both nationally and in other competitions, and the results of international cricket, rugby, ice hockey and basketball games can also push down the market. However, it seems that soccer has the greatest impact. Interestingly, I lost the match. Eeven if the market price goes down in some cases, there are not many cases where the market price goes up when the game is won. This may not be so outlandish. Unfortunately, defeats in sports matches have been found to be associated with increased murders and suicides in the city in which the team is based.
By analogy with that, the outcome of a big sporting event may affect trading behavior by influencing the mood of the spectators. The data quoted is based on the results of sports competitions from the 1970s to the early 2000s. As a result, market behavior may have changed since then, and the relationship as before may no longer hold. On the other hand, these results have been seen in all countries and sports, so the conclusions can be said to be somewhat credible. The research paper, entitled “Sports Sentiment and Stock Returns,” by Alex Edmans and colleagues, discovers that investor moods move the market in different ways.
Unlike some studies, this finding does not mean that the market is necessarily inefficient. You don’t always know the outcome of a big sport in advance, so you don’t always have the freedom to make money there. However, the broader conclusions may be useful to investors. That is, worsening investor sentiment, whether as a result of economic news or a reaction to sports match results, can affect a wide range of markets, even temporarily.