GEOPOLITICAL EFFECT: INVESTOR SENTIMENT AND STOCK RETURNS ADMIST ISRAELI-PALESTINIAN CONFLICT Nurul Fauziyah(a), Hesti Eka Setianingsih(b) and Fuad Hasyim(c)
(a) Airlangga University, Indonesia, nurul.fauziyah-2022[at]feb.unair.ac.id
(b) Airlangga University, Indonesia, hesti.eka.setianingsih-2023[at]feb.unair.ac.id
(c) Airlangga University, Indonesia, fuad.hasyim-2023[at]feb.unair.ac.id
Abstract
The Israeli-Palestinian conflict is a geopolitical event that could potentially trigger economic uncertainty and volatility in global financial markets. The study aims to determine the level of stability of sharia and conventional stocks during the escalation of the Israeli-Palestinian geopolitical conflict. The approach uses the event study method to investigate market reactions to the Israeli-Palestinian geopolitical conflict. The objects in this study were selected using purposive sampling methods from countries in Southeast Asia. The results show that sharia stock market reactions are more stable in geopolitical turmoil than conventional stock markets. This finding supports the risk as feeling theory, which posits that while investors^ emotions and feelings do influence market reactions, these effects are more controllable in sharia stocks.
