Impact of COVID-19 Outbreak on the Stock Market: An Evidence from Select Economies

Abstract

COVID-19 quickly spread all over the world and dramatically affected the financial markets in almost everycountry. Its spread created havoc in the market, and investors fearing risk suffereda significant amount of financialloss in a very short time. This article aims to analyze the impact of COVID-19 on stock markets in the top six affected countries based on the total number of cases confirmed. In addition, it also analyzes the stock market volatility caused by the virus and the abnormal returns generated by the markets during the pandemic. We employevent study methodology in different sub-periods to examine the most volatile event periods with the daily rise in the Covid cases and subsequent returns generated by the markets during these sub-periodsin relation to the daily rise in the case. The increase in volatility and the presence of significant abnormal returns among the sample indices show the impact of COVID-19 on stock markets. The result reveals that Brazilian stock indices show the highest decline among the selected countries, with a fall of more than 50% during the pandemic, while Mexican indices show the lowest fall of around 30% during the same period.

Transfer Entropy Granger Causality between News Indices and Stock Markets in U.S. and Latin America during the COVID-19 Pandemic

“…For example, once the news of the first COVID case was reported, BOVESPA fell by −7.26% and MEXBOL by −4.59%. By the end of April 2020, the stock markets continued to decline, but the volatility was higher [ 54 ]. Furthermore, news about vaccination is correlated with the stock market, since the MERVAL, BOVESPA, and IPSA increased their volatility.…”

Prediction of Physical therapy stock prices by telehealth stocks and COVID19 cases

“…and from the visual orientation we can see the trend in the data Before dealing with the trend we have to deal with seasonality of data but as the data is daily so there is no need to seasonally adjust the data. After that ADF stationarity test was conducted to all variables and showed that data need to be trend adjusted as shown in table (1).…”

“…Since then, the disease has spread globally, resulting in the continuing COVID-19 pandemic. Several publications have reported on the influence of covid on stock markets (1).…”

“…Figure (1): The flow of the statistical designOf the current study3.Results:Data were collected in data collection table on excel and then plotted in R as shown in figure (2) and from the visual orientation we can see the trend in the data Before dealing with the trend we have to deal with seasonality of data but as the data is daily so there is no need to seasonally adjust the data. After that ADF stationarity test was conducted to all variables and showed that data need to be trend adjusted as shown in table(1).The first difference of log of data is found to be extremely useful to make data stationery. Then this transformation is applied and then revisualization was conducted as in figure (3) and the ADF test was reconducted to ensure stationarity of data as shown in table (1).The best lag number was investigated using many tests.…”

COVID-19 and tourism sector stock price in Spain: medium-term relationship through dynamic regression models

“…All the studies analyzed the initial effect of the pandemic; the most widely used methodologies include event studies (Ganie et al 2022;He et al 2020;Huo and Qiu 2020;Hung et al 2021;Jabeen et al 2022;Liu et al 2020;Ofori-Boateng et al 2021), panel data regression (Amin et al 2021;Mdaghri et al 2020;Topaloglu et al 2021) and classic regression models (Ahmed 2020;Ahmed et al 2021;Schoenfeld 2020), among others. These studies, especially those conducted in developed economies, reach a similar main conclusion: they confirm the significant negative effect of COVID-19 on the stock market.…”