Temporal Dynamics of BRIC-A and US Stock Indices: Pre-, During-, and Post-Pandemic Analysis

Berchmans, Vasanthi Author and Justin John Stephen

Management (Montevideo), 2025, vol. 3, 315

Abstract: Introduction: Global financial markets exhibit varying degrees of interdependence, which can shift during systemic disruptions such as the COVID-19 pandemic. Understanding these dynamics is crucial for investors, policymakers, and risk managers. Objectives: To examine the evolving interdependence between the US stock market and BRIC-A stock markets (Brazil, Russia, India, China, and South Africa) across three distinct periods: pre-pandemic, pandemic, and post-pandemic. Methods: The Johansen cointegration framework was used to test for the presence and stability of long-run relationships, and the Granger causality test identified short-run directional linkages among the markets during the three phases. Results: The analysis revealed that the long-run equilibrium between the US and Indian markets remained stable throughout, while structural shifts were observed in the relationships with China and Russia, indicating heterogeneous market responses to systemic shocks. In the short run, bidirectional linkages between the US and all BRIC-A markets existed before the pandemic; however, post-pandemic, these persisted only with India’s BSE and China’s SSE indices. Conclusions: Global crises can recalibrate financial market integration, reducing linkages among major markets and reshaping interdependencies. These findings have significant implications for portfolio diversification strategies, contagion risk management, and international policy coordination during periods of systemic disruption.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:dbk:manage:v:3:y:2025:i::p:315:id:1062486agma2025315

DOI: 10.62486/agma2025315

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