Financial indicators and stock price movements: The evidence from the finance of China

Abstract

As a representative of the capital market, the stock market has become a barometer of the national economy. The stock prices fluctuation plays as a benchmark role in leading public and private enterprises. This paper studied the relationship between the quarterly financial indicators and stock price movements in Chinas financial industry. Through the methods of literature research and empirical data statistical analysis, regression models are established to explore the relationship between these variables. The results indicated that total asset turnover rate has the largest impact on the stock price increase in financial industry companies among those selected financial indicators. Besides, we compared the results of banks and other financial enterprises to further research. It turns out that there is a big difference between Banks and non-bank financial enterprises. As for banks, there is a significant positive correlation between the multiple of cash dividend protection and stock price movements.