DOES WEATHER MATTER FOR STOCK PRICES? EVIDENCE FROM INDONESIAN CONVENTIONAL AND SHARIA STOCK INDICES
DOI:
https://doi.org/10.54783/8h67sb89Keywords:
Behavioral Finance, Weather Effect, Stock Prices, Sharia Stock Index, Indonesia Stock ExchangeAbstract
This study examines the impact of local weather conditions on conventional and Sharia stock indices in the Indonesia Stock Exchange (IDX) from a Behavioral Finance perspective. Daily weather data, including humidity, rainfall, sunshine duration, minimum temperature, and maximum temperature, were collected from BMKG Bandung, while stock index data covered IDX80, Kompas100, ISSI, and JII throughout 2023 (237 observations). Using Ordinary Least Squares (OLS) regression, the results indicate that weather effects differ across market segments. Minimum temperature significantly influences IDX80 and Kompas100, whereas humidity, sunshine duration, and minimum temperature affect ISSI. For JII, significant effects are found for rainfall, minimum temperature, and maximum temperature. These findings suggest that local environmental conditions can influence investor behavior, particularly in Sharia stock markets, highlighting the relevance of behavioral factors in explaining stock price movements beyond traditional economic determinants.
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