The Impact of the Covid-19 Pandemi̇c on Financial Markets: An Analysi̇s on Developed Countries

The impact of COVID-19 on financial markets has become a significant topic of research in the literature. Particularly, the declaration of the outbreak as a global pandemic by the World Health Organization on March 11, 2020, altered investors' risk perceptions and led to major fluctuations in stock markets. In this study, the response of stock indices in BRICS-T countries (Brazil, Russia, India, China, South Africa, and Türkiye) to the pandemic declaration was analyzed using the Event Study method. The event window was set as -5 to +5 days, and the estimation window was selected as the 90 days preceding the event. As a result of the analysis based on the comparison of normal and abnormal returns, it was found that all BRICS-T stock markets, except China, were not semi-strong form efficient. In addition, the results of the paired sample t-test applied to all stock markets demonstrated that the difference between abnormal returns calculated before and after COVID-19 was statistically significant. In this context, it was concluded that, unlike previous outbreaks, the COVID-19 pandemic led to significant fluctuations in financial markets. This study provides an important contribution to understanding the effects of the pandemic on emerging markets and examining investor behavior.

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The Effect of the COVID-19 Crisis on the Risk and Return Relationship in the Stock Markets of Emerging Countries

Altan

2022

OPUS Toplum Araştırmaları Dergisi

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When the crises experienced throughout history are examined, it is seen that although the crises have common aspects in economic and financial terms, they are not the same. Unlike all previous crises, however, instead of economic and financial considerations, we are faced with the COVID-19 crisis, which is an epidemic disease. Examining the effects of financial crises on financial markets is very important for both investors and countries. Therefore, in the study, the risk-return relationship between the stock markets of India, Brazil, Indonesia, Turkey and South African countries were analyzed with the GARCH-M method in Pre-COVID-19 crisis term and COVID-19 crisis term. As a result of the analysis, it was observed that the response to the COVID-19 crisis occurred mostly in the Turkish stock market, while the reason for the volatility in other stock markets was the previous period. During the COVID-19 crisis, it has been obtained that they provide additional returns to their investors in response to the increased risk in the Indonesian and Turkish stock markets.

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The Impact of the Covid-19 Pandemi̇c on Financial Markets: An Analysi̇s on Developed Countries

Cited by 6 publications

References 30 publications

Great Reset

Great Reset

Efficient Market Hypothesis During Covid-19 Pandemic: Brics-T Countries

The Effect of the COVID-19 Crisis on the Risk and Return Relationship in the Stock Markets of Emerging Countries

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