The Impact of Global Warming Sentiment on Investor Gain in Stock Market

Abstract

This study investigates how weather and investor sentiment indicators affect stock market returns. The findings reveal that extreme hot weather caused by global warming strengthens investor sentiment. This implies that investors tend to become more aggressive and risk-taking in hot weather conditions, resulting in overconfident and optimistic behavior, leading to higher returns. Rather than dividend yields or total returns, capital gains can be better explained by the effects of investor sentiment and scorching temperatures. The study concludes that scorching temperatures are a reliable indicator for measuring the impact of extremely hot weather on returns in connection with investor sentiment.