An Empirical Analysis of Investor Behavior: A Post-COVID-19 Examination of Herd Behavior in the National Stock Exchange of India (NSE)

This research paper investigates investor behavior, specifically focusing on herd behavior, in the National Stock Exchange of India (NSE) during the post-COVID-19 period, from 2020 to the present. Utilizing daily closing prices of companies listed on the Nifty50, the study employs data sourced from the NSE website. In contrast to earlier research that demonstrated herding in developing economies, this paper adopts the methodology outlined by Christie & Huang (1995) to analyze the data. The study finds no significant evidence of herding during the broader period of market stress in the NSE, suggesting a divergence from previous trends. The results suggest that Indian investors, despite operating in a volatile market environment post-COVID-19, exhibit rational behavior. Unlike some developing economies where herding behavior has been identified, Indian investors seem to rely on private information rather than imitating the actions of their peers.