COVID-19 pandemic and stock market reaction: empirical insights from 15 Asian countries

Abstract

Since 2020, the world has been passing through a difficult time due to the outbreak of COVID-19 Pandemic. This novel public health emergency has created both demand- and supply-side shocks affecting both real and financial sectors of economies globally. One of the noteworthy immediate consequences of it was sudden nosedive of stock markets across countries in the globe. In this pre-text, this study examined the stock market behaviour in 15 selected Asian markets amid the pandemic. The results infer about the surge in market return volatilities amid the rapid spread of the coronavirus which was primarily triggered through the impaired investors’ sentiments due to the announcement effects. During this period, the stock market performances in selected Asian countries have been observed to be influenced by the reporting of the number of COVID-19 confirmed cases and death cases, stock index returns, market volatility, oil prices, inflation rate, and interest rates.

Keywords:

• COVID-19
• coronavirus
• stock market
• return volatility
• Asia

JEL Classification Code:

• C33
• E44
• G15
• I15

Acknowledgement

The authors sincerely acknowledge the suggestions given by the editors and anonymous reviewers for improving the quality and quantity of the work.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Available at: https://www.bbc.com/news/business-52089127

2 The cumulative COVID-19 confirmed cases reported for sample territories as on August 31, 2020 are China (89,288), Hong Kong (4,811), India (36,21,245), Indonesia (1,72,053), Japan (67,865), Kazakhstan (1,30,673), Lebanon (16,870), Malaysia (9,334), Pakistan (2,95,849), The Philippines (2,17,396), Singapore (56,771), South Korea (19,947), Taiwan (488), Turkey (2,68,546) and Vietnam (1040).