COVID-19 and Its Initial Signaling Effects on the Stock Markets of India, Switzerland, Taiwan and Brazil - A Comparative Analysis of the Change in the Stock Market Indices during the Initial Period of Pandemic in the Respective Countries
44 Pages Posted: 10 Sep 2021
Date Written: July 1, 2020
The world economies are highly integrated to each other. Events that occur in other economies has an impact on the stock market of a particular country. Many of the events act as financial signals and affects stock market. The purpose of this paper is to conceptualize the views and analysis of initial signaling effect of pandemic like COVID-19 on the stock markets of India, Switzerland, Taiwan and Brazil in the post pandemic declaration by World Health Organization. The number of COVID-19 reported cases during initial period of pandemic has been taken for analysis with the corresponding closing price of Sensex, Swiss Market Index (SMI), TAIEX, BOVESPA as the stock market data. The market Indices are affected due to a variety of factors, but the present study aims to find the impact of only one factor that is the pandemic caused by COVID-19 on the stock markets of India, Switzerland, Taiwan and Brazil, all other factor which would have also affected the indices are assumed to be constant. Correlation is used to test if the number of cases has any impact on the respective stock markets. This exploratory study shows a strong negative correlation between these variables which is statistically significant. Furthermore, we also try to show a comparative analysis of the aggregate change in the stock market indices during the initial period of pandemic in respective countries and try to infer that, among the four countries chosen by us, whose stock market index has been affected the most through comparing the aggregate change each country has had in its stock market indices.
Keywords: Corona Pandemic, Financial Signaling, Stock Market, Sensex, SMI, TAIEX, BOVESPA
JEL Classification: D53, G10, F01
Suggested Citation: Suggested Citation