Impact Of Corporate Announcements On Security Prices

Abstract

A functioning stock market is an essential element of a competitive economy because it provides a mechanism for allocating economic capital stock. In an ideal situation, the stock market maximizes the overall utility of the economy. Fluctuations in stock prices in the market can affect the country’s economy. Hence, the purpose of this study is to explore the impact of corporate announcements on stock price reactions. During the study period from April 1, 2022 to March 31, 2023, corporate announcements played an important role in stock price movements. For 30 Sensex companies, announcements related to performance, dividends, bonuses and new share issues, mergers and acquisitions, share allotments and media or press releases played a major role in the share price movements. From the analysis, most of the impact of corporate announcements on stock price movements is reflected after the announcement is made. The impact of corporate announcements on stock price movements was significant 10 days before and after the announcement.