Event Study Test of Incorporating Earning Announcement on Share Price

Abstract

The concept of stock market efficiency has been one of the most dominant themes in financial research for explaining the share price behaviour and the increasing globalization of financial markets has given impetus to this concept in emerging markets as well. The study of stock market efficiency plays a crucial role of keeping investor's behavior intact with release of information viz. past historical prices, corporate announcements or events. This paper aims to study the relevance of event study or semi-strong informational efficiency of the Indian Stock Market. This paper tries to explore the speed and accuracy of incorporating corporate earnings and action into share prices.