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The COVID-19 Outbreak and Affected Countries Stock Markets Response

Author

Listed:
  • HaiYue Liu

    (Business School, Sichuan University, Chengdu 610064, China, seamoon@scu.edu.cn (H.L.))

  • Aqsa Manzoor

    (Business School, Sichuan University, Chengdu 610064, China, seamoon@scu.edu.cn (H.L.))

  • CangYu Wang

    (Business School, Sichuan University, Chengdu 610064, China, seamoon@scu.edu.cn (H.L.))

  • Lei Zhang

    (School of Computer Science, Sichuan University, Chengdu 610064, China)

  • Zaira Manzoor

    (Economics Department, Shandong University, Jinan 250100, China)

Abstract

This paper evaluates the short-term impact of the coronavirus outbreak on 21 leading stock market indices in major affected countries including Japan, Korea, Singapore, the USA, Germany, Italy, and the UK etc. The consequences of infectious disease are considerable and have been directly affecting stock markets worldwide. Using an event study method, our results indicate that the stock markets in major affected countries and areas fell quickly after the virus outbreak. Countries in Asia experienced more negative abnormal returns as compared to other countries. Further panel fixed effect regressions also support the adverse effect of COVID-19 confirmed cases on stock indices abnormal returns through an effective channel by adding up investors’ pessimistic sentiment on future returns and fears of uncertainties.

Suggested Citation

  • HaiYue Liu & Aqsa Manzoor & CangYu Wang & Lei Zhang & Zaira Manzoor, 2020. "The COVID-19 Outbreak and Affected Countries Stock Markets Response," IJERPH, MDPI, vol. 17(8), pages 1-19, April.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:8:p:2800-:d:347370
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    References listed on IDEAS

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