The Impact of Covid-19 Pandemic on Islamic Index in Turkey: A Behavioral Finance Approach


  • Cagri Hamurcu 0000-0002-3248-6733
  • Muhammed Hadin Oner Phd


Islamic finance, Behavioral finance, Covid-19, index, stock


Purpose: This study aims to evaluate the effect of the Covid-19 pandemic on the stocks of the firms included in the Participation index and to examine the results obtained from a behavioral finance perspective.

Design/methodology/approach: An event study analysis is used to calculate the effect of the Covid-19 pandemic on the abnormal returns of the firms included in the Participation index in BIST100.

Findings: According to the results, it is determined that the cumulative abnormal returns in 45, 60, 75, 90, 105, and 120 days periods after Covid-19 differed compared to the previous ones and increased in average values. It could be said that stocks in the Participation index may have reacted more cautiously and in a long term to negative news compared to other stocks.

Originality: This finding could be interpreted as the effect of the pandemic had a positive effect on the Islamic index. Moreover, this result shows that Islamic financial markets have a higher level of speculative activity adaptation than their conventional counterparts. Islamic finance users tend to be conservative and underreact new announcements. On the other hand, others respond and overact to these announcements with the effect of representation bias.


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How to Cite

Hamurcu, C., & Oner, M. H. (2021). The Impact of Covid-19 Pandemic on Islamic Index in Turkey: A Behavioral Finance Approach. Journal of Financial Economics and Banking, 2(2), 15-23. Retrieved from



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