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How stock markets reacted to COVID-19? Evidence from 25 countries

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  • Bannigidadmath, Deepa
  • Narayan, Paresh Kumar
  • Phan, Dinh Hoang Bach
  • Gong, Qiang

Abstract

The objective of this paper is to analyse how COVID-19 related government policies influenced stock markets. Of the 25 countries we consider, stock returns did not react to any of the three policies – the stimulus package, lockdown, and travel ban in 20% of countries. For around 48% of countries, the effect on returns was negative, due largely to the stimulus package and lockdown policies. Of the 13 countries that experienced a change in the cash rate, returns were negative for 46% of the markets. The travel ban had the least effect on stock returns.

Suggested Citation

  • Bannigidadmath, Deepa & Narayan, Paresh Kumar & Phan, Dinh Hoang Bach & Gong, Qiang, 2022. "How stock markets reacted to COVID-19? Evidence from 25 countries," Finance Research Letters, Elsevier, vol. 45(C).
    • Handle: RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002403
    DOI: 10.1016/j.frl.2021.102161
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    4. Li, Yanshuang & Shi, Yujie & Shi, Yongdong & Yi, Shangkun & Zhang, Weiping, 2023. "COVID-19 vaccinations and risk spillovers: Evidence from Asia-Pacific stock markets," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).

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