MARKETS TURN DOWN THE VOLUMES DURING THE WORLD CUP

: The World Cup kicks off on Thursday and investors should be warned that financial markets tend to act like any emotional fan during the matches — they go quiet and nervy and don’t like losing. More than two-thirds (43) of the 64 games in this year’s tournament will be played during European or Latin American trading hours which has been shown to significantly change market behaviour. During the 2010 World Cup in South Africa — the last to have similarly timed matches to those in Russia — stock market trading volumes dropped an average of 55 per cent when the country’s teams were playing, according to a study. In soccer-mad Brazil and Argentina the reduction was even more pronounced at 75 per cent and 80 per cent respectively. It fell 38 per cent in Europe and 43 per cent in the United States, while big moments like goals cut activity a further five per cent. “People are distracted so it is bound to happen again, that would be my take,” said Michael Ehrmann, the European Central Bank’s head of monetary policy research and co-author of the analysis. Ehrmann plans to do more analysis on this tournament and with 35 games in market hours in the first two weeks alone, probably more than any World Cup in history. The original study, which looked at 15 major countries, found trading volumes dropped by a third on average even when a market’s own team wasn’t playing.

LONDON