STOCK MARKET REACTION TO COVID-19 PANDEMIC: An Empirical Analysis of Major Global Indices
- Ruchita Verma
- Dhanraj Sharma
- Shiney Sam
- ( paper pages. 397 - 406 )
Abstract
The present study examined the behaviour of the ten major stock
indices with the highest market capitalization in the global financial
market during the COVID-19 pandemic, using an event study
approach. Further, the abnormal returns (AR) from the event study
are regressed on the death cases due to COVID-19, on returns of
selected stock indices, and on market returns to obtain more robust
results. The results revealed that all the major indices were affected
by the lockdown announcement in their respective countries and
continued to yield negative abnormal returns during the lockdown
phase, except the Hang Sheng Index of Hong Kong. The opposite
reaction of the investors in Hong Kong led to an unperturbed Hang
Sheng stock market amid a global crisis. Findings will help
investors understand the behaviour of major stock indices during a
crisis period and enable them prepare their portfolios accordingly
to withstand risky periods. Also, investors' attitudes towards
investment risk can make a notable difference in the economy.
Citation
Ruchita Verma, Dhanraj Sharma, Shiney Sam.
2022.
"STOCK MARKET REACTION TO COVID-19 PANDEMIC: An Empirical Analysis of Major Global Indices"
The Nigerian Journal of Economic and Social Studies,
64 (3): 397 - 406.
JEL Classification
C23, G10, G14
