Impacts of pandemic-related stimulus packages on the stock market: evidence from India and the USA

Vineeta Kumari, Varun Kumar Rai and Dharen Pandey

International Journal of Indian Culture and Business Management, 2023, vol. 29, issue 2, 271-292

Abstract: We examine the impacts of the pandemic-related stimulus packages on the stock market during the COVID-19 period and the association between returns, volatilities, and fatality rates in the two markets. We use the event study method, vector auto regression, and correlation on a sample of 947 firms, including 452 firms from BSE500 and 495 firms from S%P500. We find a significant positive impact of the stimulus packages announced by the two governments, though with a different reaction time. The volatility index is negatively associated with the market returns in both markets. However, the market returns in both nations are not correlated with the fatality rates in these nations. We also provide evidence of similar pre-COVID period returns in both markets. More negative impacts during the COVID period were noticed in India than in the USA. The market recovery period is marked with higher recovery rates in India than in the USA.

Keywords: COVID-19; event study; India; market returns; USA; vector auto regression; VAR; global pandemic. (search for similar items in EconPapers)
Date: 2023
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