Stories | July 8, 2014

Cup-o-nomics 2014: Will the football make a difference to share prices?

The 2014 FIFA World Cup captured the hearts of many – and big tournaments can also affect the share markets.

How do big sports tournaments hit investments? Read on for just a few examples from previous events.

Share market trades “decreased significantly”
The Dutch central bank – De Nederlandsche Bank – writes that during the 2010 World Cup matches, trading on share markets “decreased significantly” and that when a country’s national team played, its national stock market prices moved out of line with those in other countries.
ING’s Dutch consumer economics team details the research here (in Dutch only). It tells how the number of trades on the share market during the 2010 World Cup matches by national teams dropped by 83% in Chile and 72% in Argentina, compared with 21% in England and Italy. In the Netherlands, the figure was 29%.
It seems on field action may actually make a difference off field.
Interestingly, Chile and Argentina were also the “super fans” in ING‘s Cup-o-nomics 2014 research.

Is it a good time to buy?
Writing for eZonomics ahead of the Euro 2012, Soccernomics author Simon Kuper explained how big sports matches can have big effects on share markets.
Kuper explained that although it might look like an opportunity to buy “markets don’t work that way” and “function best at times of busyness”.

New Year, Daylight Saving and other calendar quirks
Big sports tournaments are not the only times when some argue share markets drop.
In Does midsummer madness affect share markets?, eZonomics details five so-called “calendar effects”, including the New Year, the start of Daylight Saving and election cycles in the United States.

eZonomics team
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