Academic journal article Journal of Financial Management & Analysis

Impact of Indian Cultural Variables on Stock Market Activity and Movement - the 'Rahu - Umbra Region of the Cosmos - - Kala' Hypothesis*

Academic journal article Journal of Financial Management & Analysis

Impact of Indian Cultural Variables on Stock Market Activity and Movement - the 'Rahu - Umbra Region of the Cosmos - - Kala' Hypothesis*

Article excerpt


India is a fast emerging techno-economic power now in the world and will be one of the top three economies in the world. India was a blindspot for a long time for the western world and was associated with elephants and snake charmers. Globalisation and the resulting flattening of the world have given an advantage to India due to its low cost in software services, engineering, designing and financial skills. It is due to the IT industry that the world has come to recognize the power of India. The high-profile BRIC report predicts that India would be one of the economic super powers by 2050(1).

Under these circumstances it is no surprise that Indian capital markets have seen unprecedented growth in the recent times. The Bombay Stock Exchange bell-weather index, the BSE Sensex, has reached great heights recently. The investment climate in the country has become very active and stock investments are an essential component of every prudent investor's portfolio today. Therefore studies of factors that affect investment decisions have gained currency. This paper tries to understand the impact of cultural factors on stock investment decisions.

World Cultures

The term culture refers to a state of intellectual development or behaviour. The unique characteristic of culture is that it is passed on from one generation to another. The social and political forces that influence the growth of a human being are defined as culture. Cultures have flourished across the world since ancient times. The prominent among ancient cultures are Indian, Egyptian and Greek cultures. According to Bhasham2 Indian culture can be treated as the mother of all cultures. The most striking characteristic of Indian culture is its continuity. Few countries in the world have such an ancient and diverse culture as India's. Stretching back in an unbroken sweep over 5000 years, India's culture has been enriched by successive waves of migration which were absorbed into the Indian way of life. Its physical, religious and racial variety is as immense as its linguistic diversity. Underneath this diversity lies the continuity of Indian civilization and social structure from the very earliest times until the present day.

The Egyptian culture began to flourish in approximately 3000 BC. The Nile river was a perfect spot for civilization to take root-the fertile soil was the perfect catalyst for one of the richest of ancient cultures. For three thousand years, the culture on the river evolved and flourished. Egyptians managed architectural feats which were unmatched in that age. The pyramids, Sphinx, and other such large monuments of Egyptian culture are still in existence today, creating a great tourist incentive. Modern Egypt retains the river which made its predecessor so powerful - - the Nile River - - and also the more modern Suez Canal, which connects the Mediterranean Sea to the Indian Ocean.

Ancient Greece is a period in Greek history that lasted for around three thousand years. It is generally considered to be the seminal culture which provided the foundation of Western Civilization. Philosophers like Plato, Aristotle and Socrates enriched this culture. Greek culture had a powerful influence on the Roman Empire, which carried a version of it to many parts of Europe. The civilization of the Ancient Greeks has been immensely influential on the language, politics, educational systems, philosophy, science, and arts, giving rise to the Renaissance in Western Europe and again resurgent during various neo-Classical revivals in 18th and 19th century Europe and the Americas.

One of the common features of all world cultures is the importance given to astrology and its impact on human behaviour. Oriental or occidental cultures have all valued the importance of planetary positions and their influence on decision making. An important outcome of this aspect is the classification of time into auspicious and inauspicious durations. …

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