Cultural New Year Holidays and Stock Returns Around the World

Using data from eleven major international markets that celebrate six cultural New Year holidays not on January 1st, we show that stock markets tend to outperform in days surrounding the cultural New Year. After controlling for firm characteristics, an average stock earns a 2.5 percent higher abnormal return across all markets in the month of the cultural New Year relative to other non-January times of the year. Further evidence suggests that a positive holiday mood in conjunction with cash infusions prior to the cultural New Year produces elevated stock prices, particularly among the stocks most preferred and traded by individual investors