 COMPARATIVE ANALYSIS OF HUNGARIAN AND ROMANIAN STOCK MARKET INDICES IN CONTEXT OF COVID-19Edina Kulcsár ()
Annals of Faculty of Economics, 2020, vol. 1, issue 1, 252-263 Abstract: The coronavirus pandemic, erupted in 2019, re-emphasized the importance of dealing with risk and uncertainty. In addition to difficulties caused in public and health sectors, the negative consequences of COVID-19 outbreak are more and more obvious also in economy. The rapidly spread of virus from China to Europe and U.S., seriously tests the countries’ ability to deal with such an unexpected situations, both health-wise and economically. As the same time, measures adopted by governments like travel restrictions have further amplify the difficulties in some aspects. In response to growing uncertainty, individuals have suddenly changed their consumer behaviour, manifested in excessive food purchases which caused certain food products shortage. Companies have restrained production and spending. Some categories of services are particularly affected, restaurants and hotel units temporarily fully suspended their activities. There are also serious transport restrictions, airlines cancelled several flights. The news of the outbreak of the novel coronavirus, the rapid spread worldwide, and the measures taken by governments, the panic reactions of individuals and companies, negatively impact the economic and financial stability. The negative effects caused by the coronavirus affect relatively quickly the financial markets, which show terrible volatilities. On March 18, 2020, the stock market prices declined more than 30% compared to the peak price value of recent years, which can be considered significant. Since the outbreak of the coronavirus pandemic, several articles deals with the impact of virus-induced uncertainty on volatility. The results related studies highlights the correlation between COVID-19 cases, deaths and different stock indices price volatility. Based on these, the aim of this article is to examine the relationship between the main stock indices, namely BUX and BET of two neighbouring countries in Central and Eastern Europe (Romania and Hungary) and the COVID-19 cases in European Union. In order to investigate this relationship we used simple linear regression. The results show that in both countries’ stock indices case there is medium-strong correlation between BUX (R=0,6651), BET (R=0,6001) and COVID-19 European Union’s cases. By investigation of stock indices changes in the analysed period we can conclude that the time of reaction of stock markets and the intensity of stock prices changes is quite different in case of BUX (36,27%) and BET (31,12%). Keywords: risk; uncertainty; COVID-19; pandemic; financial crisis; stock market index; volatility (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2020:i:1:p:252-263 Access Statistics for this article More articles in Annals of Faculty of Economics from University of Oradea, Faculty of Economics Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.