England’s Euro 2016 exit could wipe £6bn off stock market

Dubai / Emirates Business

England’s early elimination from the Euros 2016 could wipe £6 billion off the stock market in a single day, a finance expert from London Business School has warned.
Alex Edmans, Professor of Finance, London Business School, on Sunday said the effect of football results on national mood is so strong that it can spill over into the stock market and cause swings of billions of pounds.
“My research shows that a loss in a major football competition can have a profoundly negative effect on investor mood. Share prices are affected not only by fundamentals, but also by emotions. Sports have huge effects on people’s emotions”, Edmans explains.
Edmans and his co-authors, from the University of Colorado and BI Norwegian Business School, investigated the link between 1,100 international football matches and stock returns in 39 countries in the paper Sports Sentiment and Stock Returns.
The results were striking. Being eliminated from a regional tournament, such as the Euros, leads to the national market falling by 0.3 per cent the next day.
“When applied to the UK stock market, this translates into a single-day loss of £6 billion”, says Edmans.