Do Investors Overreact to Earnings Surprises? Evidence from NIFTY 100
No Thumbnail Available
Date
2025-09-05
Journal Title
Journal ISSN
Volume Title
Publisher
Lumar Publisher
Abstract
This study takes a closer look at how investors react to earnings surprises from the Nifty 100 companies for Q3 from the financial year 2022-2025. Earnings announcements are financial events that can bring in a change in stock prices, often driven by the emotions of investors. This research analyzes the percentage change in the stock prices after the earnings announcement has been made to determine the investors’ overreaction to the unexpected earnings, if any. We have assessed the post-earnings stock price pattern to understand market efficiency and the implications of earnings surprises. By analyzing cumulative abnormal returns (CAR) in the days following earnings announcements, we assess whether investors exhibit overreaction and subsequent correction. The research differentiates between negative and positive surprises, applying a paired t-test and the Wilcoxon Signed Rank Test to evaluate statistical significance. Additionally, normality tests were conducted to determine the appropriate statistical approach, ensuring the robustness of results.
Description
Keywords
Earnings announcements, Nifty 100, Financial markets, Market efficiency, Cumulative abnormal returns, Earnings Surprises
Citation
Bathia, A. ., Goel, K., Nigudkar, M., Tripathi, M. M., Naik, P., & Popat, S. (2025). Do Investors Overreact to Earnings Surprises? Evidence from NIFTY 100. International Insurance Law Review, 33(S4), 185-196. https://doi.org/10.64526/iilr.33.S4.11