Is Sudden News an Origin of More Systematic Risk in Common Stocks?

The existence of political risk is so common in the equity markets of the world and specifically for Pakistan. The business owners are always with their extravagant concerns in this connection while formulating business strategies and policies for their desired returns. The purpose of this research is to examine whether or not sudden news poses a more systematic risk in equity market. The findings suggest that the investors of all kinds take more risk and follow the similar patterns to invest in equity market when there is the sudden news. On the other hand, if there is no sudden news, then there is a different investment pattern of investors in equity market along with the lesser magnitude of taking risks.