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What moved share prices in the nineteenth†century London stock market?

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Listed:
  • Gareth Campbell
  • William Quinn
  • John D. Turner
  • Qing Ye

Abstract

Using a new weekly blue†chip index, this article investigates the causes of stock price movements on the London market between 1823 and 1870. We find that economic fundamentals explain about 15 per cent of weekly and 34 per cent of monthly variation in share prices. Contemporary press reporting from the London Stock Exchange is used to ascertain what market participants thought was causing the largest movements on the market. The vast majority of large movements were attributed by the press to geopolitical, monetary, railway†sector, and financial†crisis news. Investigating the stock price changes on an independent list of events reaffirms these findings, suggesting that the most important specific events that moved markets were wars involving European powers.

Suggested Citation

  • Gareth Campbell & William Quinn & John D. Turner & Qing Ye, 2018. "What moved share prices in the nineteenth†century London stock market?," Economic History Review, Economic History Society, vol. 71(1), pages 157-189, February.
    • Handle: RePEc:bla:ehsrev:v:71:y:2018:i:1:p:157-189
    DOI: 10.1111/ehr.12429
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    References listed on IDEAS

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    1. Grossman, Richard & Campbell, Gareth & Turner, John, 2019. "Before the Cult of Equity: New Monthly Indices of the British Share Market, 1829-1929," CEPR Discussion Papers 13717, C.E.P.R. Discussion Papers.
    2. Christopher A. Hartwell & Paul M. Vaaler, 2023. "The Price of Empire: Unrest Location and Sovereign Risk in Tsarist Russia," Papers 2309.06885, arXiv.org, revised Nov 2023.
    3. Rajabrata Banerjee & Tony Cavoli & Ron McIver & Shannon Meng & John K. Wilson, 2023. "Predicting long‐run risk factors of stock returns: Evidence from Australia," Australian Economic Papers, Wiley Blackwell, vol. 62(3), pages 377-395, September.

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