Influence of the climate change on the stock market

Abstract

The parameters of the natural climate are rainfall, humidity, maximum temperature, minimum temperature in a day, carbon dioxide emissions, solar radiation intensity etc, if there is an abrupt changes in the parameters it will cause natural calamities. The risk of business not only effected with right decisions at right times and also effected with climate changes; as the action of purchasing the goods by the people are influenced by the climate. Bankers are at high risk, they face difficulties in collecting the loans. Climate physical changes may damage properties of the governments and individual people. People get financial losses so they change their purchasing behavior. Both the weather and climate have a great influence on the behavior of tourist; better the climate more the tourism business. While the floods caused to downfall the finances of people living in the state, they could also have an impact on the portfolios of thousands of others in the form of stocks of companies with links to that particular state. Here we considered the real time scenario: remarkable heavy rainfall during the monsoon season causes the severe floods which was happened from 9th August 2018, affected the India’s south state Kerala. Due to the intense flooding the red alert was announced by the Kerala State Disaster Management Authority. Because of this, a major damage was happened to various sectors like tourism, transportation, business, finance etc. All the operations of Cochin International Airport, Kerala which was India's fourth busiest international traffic were suspended for more than 15 days in August, for the reason runway flooding.In this paper, it is aimed to examine the effect of rain fall at flood time in Kerala on related stocks and gold rates of Kerala.