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Influence Of Covid-19 Related Media And News On The Stock And Crypto Markets

Author

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  • Domagoj Sajter

    (Faculty of Economics and Business, University of J. J. Strossmayer in Osijek)

  • Matija Kuzmić

Abstract

The entire world was significantly impacted by the COVID-19 pandemic, leading to confusion and turbulence in healthcare systems, as well as to extreme uncertainty in the financial realm. There was a profound distress in stock markets due to the enormously elevated levels of risk instigated by the pandemic, which additionally inflated investors’ losses. The contagion was supplemented by a surge of false stories that appear to be news (“fake news”) that circulated throughout all media channels, thus additionally amplifying uncertainty. This paper expands the previous literature by investigating media impact on prominent indices of the stock and cryptocurrency markets. RavenPack Panic and Fake News indices were utilized to examine their influence on S&P 500 and crypto (Royalton CRIX) indices’ daily movements by employing OLS and quantile regression. The results exhibit that there are noteworthy dependencies over the conditional distribution, but they present only a small influence on observed indices. Fake news influences the cryptocurrencies’ daily movements in a bearish market, however the effect is very weak. Furthermore, media-induced panic is significant in both exceptionally bearish and bullish conditions considering S&P 500 daily returns, but is also exhibiting low impact.

Suggested Citation

  • Domagoj Sajter & Matija Kuzmić, 2024. "Influence Of Covid-19 Related Media And News On The Stock And Crypto Markets," Ekonomski pregled, Hrvatsko društvo ekonomista (Croatian Society of Economists), vol. 75(2), pages 171-193.
    • Handle: RePEc:hde:epregl:v:75:y:2024:i:2:p:171-193
    DOI: 10.32910/ep.75.2.3
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    JEL classification:

    • G19 - Financial Economics - - General Financial Markets - - - Other
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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