Bannigidadmath D, Narayan PK, Phan DHB, Gong Q. How stock markets reacted to COVID-19? Evidence from 25 countries.
Financ Res Lett 2022;
45:102161. [PMID:
35221817 PMCID:
PMC8856896 DOI:
10.1016/j.frl.2021.102161]
[Citation(s) in RCA: 4] [Impact Index Per Article: 2.0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Received: 08/21/2020] [Revised: 11/14/2020] [Accepted: 05/19/2021] [Indexed: 05/26/2023]
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.
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