Effect of COVID-19 on Stock Price: A Time Series-Based Analysis of FMCG and Consumer Durables Sector in India

Sanjib Biswas (), Gautam Bandyopadhyay () and Banhi Guha ()
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Sanjib Biswas: National Institute of Technology
Gautam Bandyopadhyay: National Institute of Technology
Banhi Guha: St. Xavier’s University

Chapter Chapter 32 in Applications of Operational Research in Business and Industries, 2023, pp 495-512 from Springer

Abstract: Abstract In recent time, Indian stock market (ISM) has been confronted with the effect of COVID-19. Since the last week of March 2020, the country was under complete lockdown other than essential services. Though, Government of India has taken several economic measures as a part of the risk mitigation plan, in tune with the global economic slump, ISM has witnessed volatility in the stock prices. In this backdrop, the present study attempts to analyze the immediate short run impact of the COVID-19 crisis on ISM focusing two sectors such as Fast-Moving Consumer Goods (FMCG) and Consumer Durables (CD) listed in BSE, India. Since, the products of these two sectors are of common use by the household, it is interesting to unveil the impact of COVID-19 on the stock prices of the constituent companies. The study period is from April 01, 2013 to March 31, 2021. We consider top 25 FMCG and 05 CD stocks based on their aggregated market capitalization (for the period FY 2013–2014 to FY 2020–2021). Monthly closing stock prices of were collected from the BSE database. The underlying objective is to uncover the nature of impact of COVID-19 on the stock prices of these companies. A time series analysis is carried out to discern the effect of the outbreak of COVID-19 on the closing stock price movements of the companies under study. We use autoregressive integrated moving average (ARIMA) model to predict the monthly closing prices for the period April 2020–March 2021 and calculate the deviation for all the stocks. It is seen that the companies got hit by COVID-19. The result contradicts the fact the companies which have multiple products and better reach in the market could stand. The study supports the general notion that luxury goods were not purchased during the crisis period.

Keywords: COVID-19; Bombay Stock Exchange; Stock price movement; Time series model; ARIMA (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-981-19-8012-1_32

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DOI: 10.1007/978-981-19-8012-1_32

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