The Stock market reaction to the Unexpected Events in Sri Lanka

This study investigates the stock market reaction to the unexpected events from January 2018 to July 2022 in the Colombo Stock Exchange (CSE), Sri Lanka. It mainly covers catastrophic, political, economic, and pandemic events and their impact on the stock market index using mean-adjusted event study methodology. All Share Price Index (ASPI) was used as a stock market index. The event window period was the pre- and post-event period of 2 days, 5 days, and 15 days, and the estimation period was 100 days. Finally, the event study identified that the stock market reacts positively and negatively to the available information. Therefore, the research concludes that the stock market is semi-strong inefficient.