Short Term Stress of Covid-19 on World Major Stock Indices

Abstract

The main objective of this study is to check the short-term stress of COVID-19 pandemic on the American, European, Asian, and Pacifc stock market indices and furthermore the correlation between all the stock markets during the pandemic. Secondary data of 41 stock exchange from 32 countries have been collected from investing.com website from 1st July 2019 to 14th May 2020 for the stock market and the COVID-19 data has been collected according to the frst cases reported in the country, stocks market are classifed either developed or emerging economy, further divided according to the subcontinent i.e. America, Europe, and Pacifc/Asia, the main focus in the data is the report of frst COVID-19 cases. The study reveals that there is volatility in the all the 41 stock market (American, Europe, Asia, and Pacifc) after reporting of the frst case and volatility increase with the increase of COVID-19 cases, moreover, there is a signifcant negative relationship between the number of COVID-19 cases and 41 major stock indices of American, Europe, Asia and Pacifc, European subcontinent market found more efected from the COVID-19 than another subcontinent, there is Clustering efect of COVID-19 on all the stock market except American’s stock market due to smart capital investing.