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Sectoral Performance and the Government Interventions during COVID-19 Pandemic: Australian Evidence

Author

Listed:
  • Nhan Huynh

    (Department of Accounting, Economics and Finance, Swinburne Business School, Swinburne University of Technology, Melbourne, VIC 3122, Australia)

  • Dat Nguyen

    (Department of Accounting, Economics and Finance, Swinburne Business School, Swinburne University of Technology, Melbourne, VIC 3122, Australia
    Assurance Department, PwC Vietnam, Ho Chi Minh City 70000, Vietnam)

  • Anh Dao

    (Department of Accounting, Economics and Finance, Swinburne Business School, Swinburne University of Technology, Melbourne, VIC 3122, Australia
    School of Mathematics and Statistics, Faculty of Science, The University of Melbourne, Melbourne, VIC 3010, Australia)

Abstract

This study explores the contrasting impacts of the COVID-19 pandemic on various industries in Australia. Considering all daily announced information, we analyzed the diverse impacts of COVID-19 on the sectoral stock returns from 26 January to 20 July 2020. Sixteen out of twenty examined stock indices negatively react to the daily rise in COVID-19 confirmed cases. Several actions from the Australian government to control the pandemic are relatively ineffective in boosting the overall financial market; however, some positive interactions are captured in five sectors of industrials, health care, metals and mining, materials, and resources. The result shows that all industries that benefited from government financial assistance are either shielded or less severely affected by the pandemic. While sectors that did not directly receive financial remedies relatively showed no enhancement in their overall performance. Having achieved short-term success in helping the economy, the government recorded an all-time high deficit since 2004 that might eventually lead to adverse effects on the overall economy. The Australian equity market is found to be rationally distinct to the crude oil price risk, while positive correlations between AUD/USD rate and real estate-related sectors are reported.

Suggested Citation

  • Nhan Huynh & Dat Nguyen & Anh Dao, 2021. "Sectoral Performance and the Government Interventions during COVID-19 Pandemic: Australian Evidence," JRFM, MDPI, vol. 14(4), pages 1-16, April.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:4:p:178-:d:534775
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    Cited by:

    1. Talie Kassamany & Bernard Zgheib, 2023. "Impact of government policy responses of COVID‐19 pandemic on stock market liquidity for Australian companies," Australian Economic Papers, Wiley Blackwell, vol. 62(1), pages 24-46, March.
    2. Huynh, Nhan & Dao, Anh & Nguyen, Dat, 2021. "Openness, economic uncertainty, government responses, and international financial market performance during the coronavirus pandemic," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    3. Guglielmo Maria Caporale & Luis Alberiko Gil-Alana & Emmanuel Joel Aikins Abakah, 2023. "US policy responses to the COVID-19 pandemic and sectoral stock indices: A fractional integration approach," Applied Economics, Taylor & Francis Journals, vol. 55(3), pages 283-292, January.
    4. Emmanuel Joel Aikins Abakah & Guglielmo Maria Caporale & Luis A. Gil-Alana, 2022. "Cryptocurrencies, Technology Stocks, Covid-19 and US Policy Responses: A Fractional Integration Analysis," CESifo Working Paper Series 9624, CESifo.
    5. Mateusz Tomal, 2021. "Modelling the Impact of Different COVID-19 Pandemic Waves on Real Estate Stock Returns and Their Volatility Using a GJR-GARCHX Approach: An International Perspective," JRFM, MDPI, vol. 14(8), pages 1-8, August.
    6. Huynh, Nhan, 2023. "Unemployment beta and the cross-section of stock returns: Evidence from Australia," International Review of Financial Analysis, Elsevier, vol. 86(C).

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