Faculty of Business Administration

Visiting Scholar Seminar


Long live Hermes! Mercury retrograde and equity price

Professor Bohui Zhang
CUHK (Shenzhen)

Date: 15 April 2021 (Thursday)
Time: 15:00 – 16:30
Venue: E22-G010



Throughout history, people have believed that the motion of the planet Mercury can be used to influence their decision-making. Given that equity prices are affected by investor decision-making, this paper examines the effect of Mercury Retrograde on stock market returns. Focusing on market indexes in 48 countries, we find that the average market returns in Mercury Retrograde periods are about 3.22% annually lower than those in other periods. Our additional tests offer supporting evidence that a belief channel explains the effect of Mercury Retrograde on market returns: investors who hold an astrological belief that Mercury Retrograde can destroy their decision making will stay away from the market. This effect results in a higher risk premium required by remaining investors in sharing more risk. We further confirm that this belief channel concerns belief in ancient Greek culture, highlighting the importance of ancient culture in equity prices. Collectively, our findings suggest that investors may deem some ancient cultures important and behave accordingly.


Bohui Zhang is the executive associate dean of School of Management and Economics, presidential chair professor of finance at The Chinese University of Hong Kong (Shenzhen), the associate director of Shenzhen Finance Institute, the director of the Center for FinTech and Social Finance, and the Co-director of MSc in Data Science Programme (SFI). Before join the CUHK Shenzhen, he was the professor of finance at UNSW Business School. He studies FinTech, the media, Chinese capital market, and international capital markets. His papers have been accepted for publication in the global top-tier finance, accounting, and business journals such as the Review of Financial Studies, Journal of Financial Economics, Journal of Accounting Research, Accounting Review, Management Science, Journal of Financial Quantitative and Analysis, Journal of International Business Studies, etc. He has also been awarded with research grants from Australian Research Council, National Natural Science Foundation of China, and best paper prizes from many international conferences.