Weather Impacts on Stock Market - Evidence from Hong Kong Stock Market Between Financial Crisis

摘要

Previous research has explored the link of weather, mood and behaviors. In particular, some studies demonstrated weather impacts on stock returns. However, most literature included the sample period of financial crisis when they link weather and stock market. In this paper, we investigate the relationship of daily cloudiness and Hong Kong stock market between two financial crises from 1999 to 2006, with 1,824 samples. We believe this is important, since individuals' decisions are more likely to be calm to trade out of financial crisis period. Consequently, the weather impacts on stock market are more convincing if these impacts could still be found out of financial crisis period. OLS regression and logistic model are used to test the hypothesis. After controlling for January, Monday and seasonality, we find that lower cloudy cover could induce higher stock return between financial crisis period of 1997 and 2008 in Hong Kong.