The Response of the Stock Market to the Announcement of Global Pandemic

Min Liu, Wei-Chong Choo and Chien-Chiang Lee ()

Emerging Markets Finance and Trade, 2020, vol. 56, issue 15, 3562-3577

Abstract: This research aims at investigating the response of the stock market to the WHO announcement on 11th of March 2020 which officially declares the spread of the COVID-19 virus as a global pandemic. A total of 77 countries’ major indices have been examined by this research. The results show that (1) the pandemic announcement provides considerable negative shock on the global stock market; (2) country with different income presents a different response to the announcement. In general, the stock market in higher-income country tends to be overreacted at the beginning and bounds back more rapidly than lower-income country.

Date: 2020
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DOI: 10.1080/1540496X.2020.1850441

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