World Cup losses trigger stock market drop

World Cup Football games impact the stock markets, according to a study of De Nederlandsche Bank (DNB), published on Tuesday. A study conducted by Michael Ehrmann and David-Jan Jansen concluded that a threatening elimination of a national team during the World Cup Football tournament can negatively impact a country's stock market. To prove their theory the researchers used Italy and France as test subjects during matches in which they were eliminated. [[{"type":"media","view_mode":"media_large","fid":"27243","attributes":{"class":"media-image size-medium wp-image-2212","typeof":"foaf:Image","style":"","width":"300","height":"200","alt":"soccer"}}]] Steven Depolo/flickr

They conducted their experiment during matches that were played, at least partly, during business hours of the national stock markets. STM stocks with exchange rates, both in Paris and Milan, were used to correctly register the effects of the rates. In both cases the risk of elimination negatively affected the exchange rates. To verify the results the researchers compared the results with that of normal business days. Based on their findings the researchers reached the conclusion that emotions have an irrational effect on the financial markets. Earlier studies by economists rendered similar results, that the World Cup Football games may lead to lower exchange rates on the international stock markets the day after. During the next World Cup Football tournament, scheduled in Brazil, all games will be played after closing of the European stock markets.