The COVID-19 outbreak and stock market reactions: Evidence from Australia

Md Lutfur Rahman, Abu Amin and Mohammed Abdullah Al Mamun

Finance Research Letters, 2021, vol. 38, issue C

Abstract: We examine how the Australian stock market responded to the uncertainties created by the COVID-19 pandemic and whether the stimulus package offered by the Government helped restore confidence in the market. This study finds a negative stock market reaction to the pandemic announcement, however, among two stimulus packages related announcements, the market reacted positively only to “JobKeeper” package. The cross-sectional results suggest that the smallest, least profitable and value portfolios suffered more during the pandemic. Finally, size and liquidity are found to be the significant drivers of abnormal returns. These results generally hold for a battery of robustness checks.

Keywords: Coronavirus; COVID-19; Australian stock market; Government stimulus package; JobKeeper package (search for similar items in EconPapers)
JEL-codes: G15 G18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:38:y:2021:i:c:s1544612320316469

DOI: 10.1016/j.frl.2020.101832

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