World Equity Markets and COVID-19: Immediate Response and Recovery Prospects

Ünal Seven and Fatih Yilmaz

MPRA Paper from University Library of Munich, Germany

Abstract: The actual macroeconomic impacts of the COVID-19 pandemic will be realized over time; however, its impact on financial markets was much faster and dramatic. Following the spread of the pandemic, most global equity markets experienced significant falls and started to rebound with the announcement of economic rescue packages. However, the equity markets’ responses to the packages have varied across countries. In this paper, we first look at what may explain the differences in the equity market falls across-countries. Secondly, we study the systematic relation between the size and the type of rescue packages, the severity of the outbreak and the recovery performance of equity markets. Using cross-country OLS regressions, we find that investors’ immediate reaction to equity markets in countries with higher pandemic related deaths is more negative. Moreover, our results show that not all types of rescue packages are effective in restoring investors’ valuation of equity markets. Among different types, fiscal stimulus support seems to be a stronger predictor of equity market recovery performance. We also find that the severity of the outbreak in each country affected the equity markets’ reactions.

Keywords: COVID-19; Stock Markets; Stimulus Packages; Recovery (search for similar items in EconPapers)
JEL-codes: G15 G18 (search for similar items in EconPapers)
Date: 2020-06-08
New Economics Papers: this item is included in nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/100987/1/MPRA_paper_100987.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/101181/1/MPRA_paper_101181.pdf revised version (application/pdf)

Related works:
Journal Article: World equity markets and COVID-19: Immediate response and recovery prospects (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100987

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().