First to React Is Last to Forgive: Evidence from the Stock Market Impact of COVID 19

Hassan, S. M., and Riveros, J. (2020). First to React Is Last to Forgive: Evidence from the Stock Market Impact of COVID 19. MSR Working paper series Nr. 002-2020.

34 Pages Posted: 4 Aug 2020

See all articles by Sherif Maher Hassan

Sherif Maher Hassan

M&S Research Hub; University of Marburg, Center for Near and Middle Eastern Studies (CNMS); Suez Canal University - Faculty of Commerce; Economic Research Forum

John Riveros

M&S Research Hub

Date Written: July 27, 2020

Abstract

COVID 19 has had parallel and uneven economic shocks across countries since its outbreak in December 2019. Stock markets as usual were the first to react, with drop rates as much as the Global Financial crises of 2008. This study uses daily data to model the dynamic impact of COVID 19 pandemic on returns of selected stock market indices and globally-traded commodities. The overall panel least squares VAR estimation results indicate a negative short termed impact of 2.3% on the performances of the stock markets when the spread rate of corona-virus increases by 1% across countries ceteris paribus. While The COVID 19 contamination rate is not statistically significant to explain the changes in the exchange rate and gold prices in the countries of analysis, yet the virus spread rate is found to be significant in steering prices of platinum, silver, WTI, and Brent crude oil.

Keywords: Panel VAR, Stock Market Indices, COVID 19

JEL Classification: G01, I15, H12, G15

Suggested Citation

Hassan, Sherif Maher and Riveros, John, First to React Is Last to Forgive: Evidence from the Stock Market Impact of COVID 19 (July 27, 2020). Hassan, S. M., and Riveros, J. (2020). First to React Is Last to Forgive: Evidence from the Stock Market Impact of COVID 19. MSR Working paper series Nr. 002-2020., Available at SSRN: https://ssrn.com/abstract=3661746 or http://dx.doi.org/10.2139/ssrn.3661746

Sherif Maher Hassan (Contact Author)

M&S Research Hub ( email )

Carlo Mierendorff Str.43
Kassel, 34132
Germany

University of Marburg, Center for Near and Middle Eastern Studies (CNMS) ( email )

Deutschhausstraße 12
Marburg, Hessen 35037
Germany

Suez Canal University - Faculty of Commerce

Ismailia
Egypt

HOME PAGE: http://foc.scuegypt.edu.eg/?page=pages&page_id=9

Economic Research Forum ( email )

Cairo
Egypt

John Riveros

M&S Research Hub ( email )

Carlo Mierendorff Str.43
Kassel, 34132
Germany

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