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Abstract
This study examines the stock market reaction of the banking sector to Indonesia’s government transition in 2024-2025 by focusing on investor sentiment. An event study approach using daily time series data is employed, with the financial sector index (IDXFINANCE) listed on the Indonesia Stock Exchange as the research object. The inauguration of the President and Vice President of the Republic of Indonesia on October 20, 2024, is designated as the event date (t = 0), with an event window of −10 to +10 trading days. Market reactions are measured using abnormal return (AR) and cumulative abnormal return (CAR), and their significance is tested using a one-sample t-test. The results show that abnormal returns in the pre-event, event, and post-event periods are not statistically significant, indicating no strong short-term market reaction. In contrast, cumulative abnormal return is negative and statistically significant both before and after the event date. These findings suggest that investor sentiment during the government transition accumulates gradually and exerts negative pressure on the performance of banking-sector stocks. Overall, the results are consistent with behavioral finance, investor sentiment, and herding behavior theories, highlighting the greater impact of political uncertainty on cumulative stock price movements rather than daily reactions.
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References
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- Baker, M., & Wurgler, J. (2006). Investor Sentiment and the Cross‐Section of Stock Returns. The Journal of Finance, 61(4), 1645–1680. https://doi.org/10.1111/j.1540-6261.2006.00885.x
- Chen, N.-F., Roll, R., & Ross, S. A. (1986). Economic Forces and the Stock Market. Journal of Business, 59(3), 383–403.
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- Wicaksono, D., Gati, V., & Rahayu, S. (2024). Perbedaan Harga Saham dan Return Saham Sebelum dan Sesudah Penetapan Calon Presiden dan Wakil Presiden Tahun 2024. Jurnal Akuntansi AKUNESA, 12(3), 283–291. https://doi.org/10.26740/akunesa.v12n3.p283-291
References
Adevia Fendiyani, E., Zulia Kunthi, D., & Fadlullah Hana, K. (2020). Pengaruh Pelaksanaan Pemilu Presiden Indonesia Tahun 2019 Terhadap Return Saham JII70 di Indonesia. OECONOMICUS Journal of Economics, 4(2), 146–168. https://doi.org/10.15642/oje.2020.4.2.146-168
Ahmed, S., Nazeer, N., Saad, M., & Talreja, K. (2025). Herding behavior, disposition effect, and investment decisions: A multi-mediation analysis of risk perception and dividend policy. Acta Psychologica, 255(December 2024), 104964. https://doi.org/10.1016/j.actpsy.2025.104964
Baker, M., & Wurgler, J. (2006). Investor Sentiment and the Cross‐Section of Stock Returns. The Journal of Finance, 61(4), 1645–1680. https://doi.org/10.1111/j.1540-6261.2006.00885.x
Chen, N.-F., Roll, R., & Ross, S. A. (1986). Economic Forces and the Stock Market. Journal of Business, 59(3), 383–403.
Dewi, N. L. A., Sinarwati, N. K., & Yudiaatmaja, F. (2023). PENGARUH REPUTASI AUDITOR, NET INTEREST MARGIN DAN SENTIMEN INVESTOR TERHADAP HARGA SAHAM SEKTOR PERBANKAN DI BURSA EFEK INDONESIA TAHUN 2020-2022. CAKRAWALA, 6(6), 2620–8490. https://doi.org/10.1007/springerreference_2023
Eka, P., Marvilianti, D., Gede, L., & Dewi, K. (2025). Analisis Perubahan Harga Saham IDX30 Sebelum dan Sesudah Penetapan Hasil Pemilu 2024. Jurnal Ilmiah Akuntansi Dan Humanika, 15(1), 148–157.
Fs Idxfinance 2024, (2024).
Luong, A. T. (2025). How does the asymmetric spillover of investor sentiment respond to economic policy uncertainty in G7 and BRICS countries ? Review of Behavioral Finance, 17(September), 317–341. https://doi.org/10.1108/RBF-08-2024-0221
Maurya, P. K., Rohit, B., & Anand, kumar mishra. (2024). Investor sentiment and its implication on global financial markets : a systematic review of literature. Qualitative Research in Financial Markets, September. https://doi.org/10.1108/QRFM-04-2024-0087
Nguyen, A. T., & Nguyen, N. T. (2025). An insight into the implications of investor sentiment on crash risk in Asia – Paci fi c stock markets : are uncertainty factors important ? Studies in Economics and Finance, 42(4), 759–779. https://doi.org/10.1108/SEF-09-2024-0586
Pastor, L., & Veronesi, P. (2012). Uncertainty about Government Policy and Stock Prices. Journal of Finance, 67(4), 1219–1264. https://doi.org/10.1111/j.1540-6261.2012.01746.x
Putri, W. W. R., & Tartilla, N. (2024). Pengaruh Faktor-Faktor Fundamental Keuangan Terhadap Harga Saham Pada Industri Keuangan Subsektor Perbankan Bursa Efek Indonesia Tahun 2019–2020. Jurnal Aplikasi Bisnis Kesatuan, 4(1), 43–50. https://doi.org/10.37641/jabkes.v4i1.1908
Wicaksono, D., Gati, V., & Rahayu, S. (2024). Perbedaan Harga Saham dan Return Saham Sebelum dan Sesudah Penetapan Calon Presiden dan Wakil Presiden Tahun 2024. Jurnal Akuntansi AKUNESA, 12(3), 283–291. https://doi.org/10.26740/akunesa.v12n3.p283-291