England rugby loss could wipe billions from market

Billions could be wiped off England’s stock markets if the national team get knocked out of the Rugby World Cup this weekend, The Guardian has reported.

England faces Australia on Saturday in a must-win game to stay in the competition.

But if England lose the match and are eliminated, Professor of Finance at the London Business School Alex Edmans believes about £3bn could be wiped off the stock market when trading resumes on Monday.

In his research from 2007, he found that investors are fed up and pessimistic the day after a national team is eliminated from an international tournament.

According to his research, a defeat for a national rugby team leads to a fall of 0.15% on the markets. Compare that to football, where a national team's loss leads to a 0.5% drop in the markets.

“A defeat makes investors more negative about life in general,” Edmans told The Guardian. “If England were to lose, they wouldn’t just be negative about the England rugby team but also about economic outcomes in general.”

However there wouldn’t be an inverse result if England won, he said, because supporters are wildly over-optimistic about their team’s chances.

He said a loss would be a bitter blow whereas a win is expected.