In Modern times, stock markets are considered to be an important part of financial markets. Stock Market has been vital and one of the most vibrant components of the financial market in India. The stock market of the country reflects the internal health and stability of an economy that could be measured through the performance of its indices. For the smooth functioning of the stock market and analyzing its movement, it is important to determine the Behavioral biases affecting financial markets. In reference to check the behavioral biases impact on the financial market, this Paper examines the effect of dividend Announcement on the stock market of the Indian energy sector. The dividend announcement impacts on the market price of the shares; the market will react positively if the dividend is up to the expectation level of the equity investors. At the same time, if the dividend announcement is not the expectation level of the shareholders, the market reaction will in a bear trend for that particular scrip. Dividend announcements are one of the most important events and the studies on stock market reaction. For conducting this study, all listed companies in the Energy sector under Nifty 50 has been used as a sample. The secondary data has been using for analysis the dividend announcement impact on the market price of a share in the Indian energy sector on pre and post period basis. The result of the study shows that dividend announcement affects the market price of a share in the Indian energy sector.

Keywords: Dividend Announcement, Behavioral Biases, Energy Sector.