Short Term Stress of Covid-19 On World Major Stock Indices

TL;DR

This study analyzes the short-term impact of COVID-19 on 41 major stock indices across different continents, revealing increased volatility and negative correlations with COVID-19 case numbers, especially in European markets.

Contribution

It provides a comprehensive analysis of COVID-19's immediate effects on global stock markets, highlighting regional differences and the clustering effect during the pandemic.

Findings

Increased volatility in all stock markets after first COVID-19 case reports.

Significant negative relationship between COVID-19 cases and stock indices.

European markets more affected than other regions.

Abstract

The main objective of this study is to check short term stress of COVID-19 on the American, European, Asian, and Pacific stock market indices, furthermore, the correlation between all the stock markets during the pandemic. Secondary data of 41 stock exchange from 32 countries have been collected from investing.com website from 1st July 2019 to 14th May 2020 for the stock market and the COVID-19 data has been collected according to the first cases reported in the country, stocks market are classified either developed or emerging economy, further divided according to the subcontinent i.e. America, Europe, and Pacific/Asia, the main focus in the data is the report of first COVID-19 cases. The study reveals that there is volatility in the all the 41 stock market (American, Europe, Asia, and Pacific) after reporting of the first case and volatility increase with the increase of COVID-19 cases, moreover, there is a significant negative relationship between the number of COVID-19 cases and 41 major stock indices of American, Europe, Asia and Pacific, European subcontinent market found more effected from the COVID-19 than another subcontinent, there is Clustering effect of COVID-19 on all the stock market except American's stock market due to smart capital investing.