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@article{191964,
        author = {Anirvinya Sarkar},
        title = {Herding in the Indian Equity Market},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {8},
        pages = {8642-8653},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=191964},
        abstract = {This research investigates the influence of occurrences on the actions of Indian investors emphasizing herd behaviour and fluctuations, in the stock market. Traditional finance theories Efficient Market Hypothesis (EMH) Modern Portfolio Theory (MPT) and the Capital Asset Pricing Model (CAPM) presume investors act nonetheless geopolitical instability frequently causes behavioural irregularities. Therefore this study employs a Behavioural Finance approach to elucidate investment choices amid uncertainty.
The research utilizes closing values of key Indian stock market indices spanning 2021 to 2025 encompassing times of notable domestic and international geopolitical occurrences. Herd behaviour is identified employing the CrossSectional Absolute Deviation (CSAD) approach whereas volatility clustering is assessed via Generalised Autoregressive Conditional Heteroscedasticity (GARCH) frameworks. The Granger causality test is applied to investigate the link between geopolitical risk and market returns.
The findings reveal that geopolitical events significantly increase stock market volatility in India. Cumulative evidence of herd mentality can be observed during times when Geopolitical risks are increased due to major world events causing a spike in stock prices or causing a temporary decline (extreme fear). There is also a typical bi-directional causal relationship between Geopolitical risks and stock prices. Hence the relationship mainly reflects the general population(or Investors) through their own emotions: therefore exhibiting Emotional and Rational Behaviours due to heightened irrational Psychology and increased volatility during Geopolitical stresses.},
        keywords = {GARCH model, Herding, Indian capital market, Volatility},
        month = {January},
        }