Stock Markets Runneth Under With Cup Loss

It may be only a game, but investors in countries that lose a match in the World Cup soccer tournament take it seriously enough that their apparent despondency leads to a drop in their home stock market index. In a study to be published in the Journal of Finance, three professors studied the market reaction of 39 nations competing for the World Cup between January 1973 and December 2004. They found that the stock market index in the country of a losing team dropped an average of 0.38% during the so-called “group phase,” and an average of 0.49% during the so-called “knock-out phase” of the tourney. Surprisingly, there was no correlation between a victory and a rise in the stock market index.