African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4062

Full Length Research Paper

Is there a weather effect? Evidence from a panel of emerging countries’ stock markets

Massimo Mariani
  • Massimo Mariani
  • Department of Corporate Finance, Lum Jean Monnet University, Casamassima, Italy.
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Fabio Pizzutilo
  • Fabio Pizzutilo
  • Department of Economics, Management and Business law, University of Bari Aldo Moro, Bari, Italy.
  • Google Scholar

  •  Received: 16 June 2018
  •  Accepted: 09 October 2018
  •  Published: 14 November 2018


A long history of psychological studies has postulated that good (bad) weather induces a positive (negative) mood. Other studies have concluded that mood can influence humankind decision-making process under risk and uncertainty. Several behavioural finance studies have raised the question of whether sunshine, temperature or other weather variables exert an impact on stock prices by affecting the behaviour of market operators, thus challenging the efficient-market hypothesis. However, very few papers on the weather effect, with contradictory results, have concentrated on the stock markets of emerging countries. We fill this gap by conducting a comprehensive analysis of the effect of four weather variables (temperature, cloud cover, humidity and wind) on the stock markets of nine emerging countries located in three climatic and economically different areas of the world. Differently from the existent literature, we extend the analysis by analyzing stock prices’ behaviour along with that of stock indexes and by inspecting the opening market activity along with the whole-day activity. Based on our results, we strongly reject the weather effect hypothesis.


Key words: Weather effect, market anomalies, efficient market hypothesis, trading behaviour, sunshine effect.