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First to React Is the Last to Forgive: Evidence from the Stock Market Impact of COVID 19

Author

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  • Sherif. M. Hassan

    (M&S Research Hub, 34132 Kassel, Germany
    Economic Research Forum (ERF), Cairo 12311, Egypt)

  • John M. Riveros Gavilanes

    (M&S Research Hub, 34132 Kassel, Germany
    Corporación Centro de Interés Público y Justicia -CIPJUS-, Bogotá 111621131, Colombia)

Abstract

The COVID 19 pandemic has had wide-ranging and severe effects on global economies. Stock markets as usual were the first to react, with drop rates as much as the global financial crises of 2008. This study uses daily data to model the dynamic impact of the COVID 19 pandemic on the first affected countries’ stock market indices and the global commodity markets. The panel least squares Vector Auto-Regressive (VAR) estimation results confirm the negative short-termed impact of the virus spread rate on the returns of the stock market indices. The spread rate is also significant to explain changes related to the prices of platinum, silver, West Texas Intermediate (WTI), and Brent crude oil.

Suggested Citation

  • Sherif. M. Hassan & John M. Riveros Gavilanes, 2021. "First to React Is the Last to Forgive: Evidence from the Stock Market Impact of COVID 19," JRFM, MDPI, vol. 14(1), pages 1-25, January.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:1:p:26-:d:475910
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    Cited by:

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    2. Beata Bieszk-Stolorz & Iwona Markowicz, 2022. "Changes in Share Prices of Macrosector Companies on the Warsaw Stock Exchange as a Reaction to the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    3. Md. Bokhtiar Hasan & Masnun Mahi & Tapan Sarker & Md. Ruhul Amin, 2021. "Spillovers of the COVID-19 Pandemic: Impact on Global Economic Activity, the Stock Market, and the Energy Sector," JRFM, MDPI, vol. 14(5), pages 1-18, May.
    4. Inna Bielova & Jaroslav Halík & Lyudmila Ryabushka, 2021. "The Causal Nexus of Consumer and Business Confidence Indexes in Early Pandemic Period: Evidence from OECD Countries," JRFM, MDPI, vol. 14(7), pages 1-14, July.
    5. Mohammad Reza Farzanegan & Mehdi Feizi & Hassan F. Gholipour, 2021. "Globalization and the Outbreak of COVID-19: An Empirical Analysis," JRFM, MDPI, vol. 14(3), pages 1-10, March.
    6. Krzysztof Dmytrów & Joanna Landmesser & Beata Bieszk-Stolorz, 2021. "The Connections between COVID-19 and the Energy Commodities Prices: Evidence through the Dynamic Time Warping Method," Energies, MDPI, vol. 14(13), pages 1-23, July.
    7. Tihana Škrinjarić, 2021. "Profiting on the Stock Market in Pandemic Times: Study of COVID-19 Effects on CESEE Stock Markets," Mathematics, MDPI, vol. 9(17), pages 1-20, August.
    8. Gharib, Cheima & Mefteh-Wali, Salma & Serret, Vanessa & Ben Jabeur, Sami, 2021. "Impact of COVID-19 pandemic on crude oil prices: Evidence from Econophysics approach," Resources Policy, Elsevier, vol. 74(C).
    9. Beata Bieszk-Stolorz & Iwona Markowicz, 2022. "The Impact of the COVID-19 Pandemic on the Situation of the Unemployed in Poland. A Study Using Survival Analysis Methods," Sustainability, MDPI, vol. 14(19), pages 1-19, October.
    10. Yuandong, Su & Khaskheli, Asadullah & Raza, Syed Ali & Yousufi, Sara Qamar, 2022. "How COVID-19 influences prices of oil and precious metals: Comparison between data extracted from online searching trends and actual events," Resources Policy, Elsevier, vol. 78(C).
    11. Zheng Chang & Alex Wei Fung NG & Siying Peng & Dandi Shi, 2024. "Stock price reactions to reopening announcements after China abolished its zero-COVID policy," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-9, December.
    12. Fiaz Ahmad Sulehri & Noor Fatima, 2022. "Nexus Among Commodity Markets And Stock Markets In Asian Countries Before & During Covid," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(4), pages 1-14.

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    More about this item

    Keywords

    panel VAR; stock market indices; COVID 19;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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