Investigating the financial impact of coronavirus on leading stock indices

Mitashi Sinha -, Ritvika Jalan -, Rohini Singh .


Purpose: The aim of this research paper is to investigate the short-term financial impact of coronavirus disease (COVID-19) on the leading stock markets indices of 20 countries, namely, India, the United States of America, Brazil, Russia, the United Kingdom, Spain, China, Germany, South Korea, France, Abu Dhabi, Taiwan, Thailand, Pakistan, New Zealand, Mexico, Japan, Canada, Singapore, and Australia. Methodology: A comparative and event study has been conducted between index closing prices of aforementioned countries during the COVID-19 outbreak (short-term and long-term basis) and pre-COVID period, keeping the S&P Global 100 closing prices as the benchmark. For this, we have used statistical tools such as t-test and Mann–Whitney U-test and interpreted and analyzed the results thereof. Findings: Since the reaction of aforementioned stock indices has been analyzed under varying time periods for the event study, it was concluded that the announcement of the virus as a pandemic and its subsequent outbreak saw a sudden decrease in market returns, however, the prices recovered quickly. Implication: Even though COVID-19 initially affected investor confidence, it failed to create a long-term impact. Originality: Till now, no research has been conducted to test the effect of the WHO declaring COVID-19 a pandemic.


COVID-19, global equity markets, and event study, Mann–Whitney U-test, S&P 100 index, t-test

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