Effects Of Terrorism And Natural Calamities On Stock Market

Abstract

The objective of the article is to reveal the consequences of Terrorism and Natural Calamities on the stock Markets. There are various risks associated with these events and most importantly no one can even forecast until and unless it occurs. This research enables us to understand that terrorism being a geopolitical event impacts the trade globally and natural calamities being region specific cause the damage to a confined area unless the area of devastation is a commercial center or a hub. It is observed that these two events bring high volatility in the market when they are either politically influenced and are responsible for great damage not only to humans but also to assets. The study used 10 events comprising of five terrorist events and five natural calamities. T test has been applied in order to understand the effect of the sample events. The study identified that these events demotivate the investors and force them to sell their investment in stock market. The effect of terrorism is significant whereas natural calamities did not have any significant effect on the stock market. But at this crucial moment any investor should not panic and shuffle the investments. Whereas speculators can take this as an opportunity to earn small gains after the occurrence of the event.