Journal Press India^®

Author Details ( * ) denotes Corresponding author

At present, the world is facing challenges resulting from the outbreak of Covid-19 pandemic. The waves of the pandemic have impacted the the Indian economy also in a big way. Due to Covid-19, major stock indices of India have suffered fall in their levels. In India, market capitalisation of ninety per cent of the listed companies have been eroded. In this paper, an attempt has been made to study the responses of the stock market due to the Covid-19 pandemic. For that purpose, event study methodology has been used and the share prices of twenty companies on the BSE SENSEX have been considered. It is concluded that the stock market has reacted negatively after the identification of Covid-19 and even before the declaration of lockdown. After the declaration of lockdown, positive movement of share prices of the selected stocks has been noticed.

Keywords

Pandemic; Event study; Abnormal Return; SENSEX; Market Model

1. Alam, M. N., Alam, M. S., & Chavali, K. (2020). Stock market response during covid-19 lockdown period in India: An event study. Journal of Asian Finance, Economics and Business, 7(7), 131–137.
2. Ashraf, B. N. (2020). Stock markets’ reaction to covid-19: Cases or fatalities? Research in International Business and Finance. Retrieved from doi.org/10.1016/j.ribaf. 2020.101249
3. Baumol, W. I. (1965). The stock market and economic efficiency. Fordham University Press, New York
4. Chen, M. H., Jang, S. C., & Kim, W. G. (2007). The impact of the SARS outbreak on Taiwanese hotel stock performance: An event-study approach. International Journal of Hospitality Management, 26(1), 200-212.
5. Elhassan, T. (2021). Impact of covid-19 pandemic on stock market returns volatility of gulf cooperation council countries. Investment Management and Financial Innovations, 18(4), 45-56.
6. Gatiso, T. T., Ordaz-Ne´meth, I., Grimes, T., Lormie, M., Tweh, C., & Kuhl, H. S. (2018). The impact of the Ebola virus disease (EVD) epidemic on agricultural production and livelihoods in Liberia. PLoSNegl Trop Dis, 12(8), e0006580.
7. Hatmanu, M., & Cautisanu, C. (2021). The impact of covid-19 pandemic on stock market: Evidence from Romania. International Journal of. Environmental Research and Public Health, 18, 9315. Retrieved from https://doi.org/10.3390/ijerph18179315.
8. Kordestani, A., Pashkevich, N., Sahamkhadam, M., & Sohrabpour, V. (2021). Effects of the covid-19 pandemic on stock price performance of blockchain-based companies. Economic Research-EkonomskaIstraživanja. Retrieved from DOI:10.1080/1331677X.2021.1986676.
9. Kumar, S. D., Kumar, D. T., Christopher, B. P., Doss, C., & George, P. (2020). The rise and impact of covid-19 in India. Frontiers in Medicine. Retrieved from doi: 10.3389/fmed.2020.00250.
10. Lee, K. Y., Jias, M., & Chan, C. (2020). Impact of covid-19: Evidence from Malaysian stock market. International Journal of Business and Society, 21(2). 607-628.
11. Liu, H., Manzoor, A., Wang, C., Zhang, L. & Manzoor, Z. (2020). The covid-19 outbreak and affected countries stock markets response. International Journal of Environmental Research and Public Health. Retrieved from doi:10.3390/ijerph17082800.
12. Mirza, N., Naqvi, B., Rahat, B., & AbbasRizvi, S. K. (2020). Price reaction, volatility timing and funds’ performance during covid-19. Financial Research Letters. Retrieved from https://doi.org/10.1016/j.frl.2020.101657.
13. Nippani, S., & Washer, K. M. (2004). SARS: A non-event for affected countries’ stock markets? Applied Financial Economics, 14(15), 1105-1110. Retrieved from doi:10.1080/0960310042000310579.
14. Pareek, S. K. & Singh, K. B. (2020). Covid-19 and its initial signalling effects on the stock market in India, International Journal of Advanced Science and Technology, 29(6), 1591-1595.
15. Thomas, T. C., Sankararaman, G. & Suresh, S. (2020). Impact of covid-19 announcements on nifty stocks. Journal of Critical Reviews, 7(13), 471-475.