Why do markets move?

When NEPSE falls 40 points, a reason arrives by evening: a political rumour, an NRB circular, interest rates. The thinking is: first the event, then the market reacts — like a ball flying off a bat.

But it doesn’t hold up. In our study of 16 big events — earthquake, lockdown, protests — the news direction held the next day, but over a week, a month and three months it was no better than a coin toss.