What Moved Share Prices in the Nineteenth-Century London Stock Market?

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    Using a new weekly blue-chip index, this paper investigates the causes of stock price movements on the London market between 1823 and 1870. We find that economic fundamentals explain about 15 per cent of weekly and 34 per cent of monthly variation in share prices. Contemporary press reporting from the London Stock Exchange is used to ascertain what market participants thought were causing the largest movements on the market. The vast majority of large movements were attributed by the press to geopolitical, monetary, railway-sector, and financial-crisis news. Investigating the stock price changes on an independent list of events reaffirms these findings, suggesting that the most important specific events which moved markets were wars involving European powers.

    DOI

    Original languageEnglish
    Number of pages33
    Pages (from-to)157-189
    JournalEconomic History Review
    Journal publication dateFeb 2018
    Issue number1
    Volume71
    Early online date08 Mar 2017
    DOIs
    StatePublished - Feb 2018

    ID: 61518171