Reading: Impact of COVID-19 on Stock Return in Asian Stock Markets

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Impact of COVID-19 on Stock Return in Asian Stock Markets

Authors:

Oshini Kumarapperuma,

Uva Wellassa University of Sri Lanka, LK
About Oshini
Faculty of Management
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N.P. Ravindra Deyshappriya ,

Uva Wellassa University of Sri Lanka, LK
About N.P. Ravindra
Faculty of Management
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R.M.M.C. Rajapaksha

Uva Wellassa University of Sri Lanka, LK
About R.M.M.C.
Faculty of Management
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Abstract

This study focuses on the impact of COVID-19 on the stock market in the Asian region, highlighting the impact on stock returns of 15 Asian stock markets while observing the nexus between COVID-19 confirmed cases and stock return. The analysis is based on daily closing price indices of selected 15 markets during the period of 1st January 2019 and 30th June 2020. The Event Study method was employed to examine the impact of COVID-19 on stock returns, by comparing the calculated abnormal return before and after the event day (20th of January 2020) under two event windows such as (0,10) and (10, 20). Fixed Effect Panel Regression Analysis was applied to observe the impact of the number of COVID-19 confirmed cases on stock return in selected stock markets. The analysis reveals that abnormal returns after the event day were negative and therefore it is apparent that the COVID-19 outbreak has drastically affected the stock returns of selected stock markets of the Asian region. Specifically, two event windows indicate that COVID-19 has an immediate negative impact on all selected stock markets while the long-term negative impact has limited only to the emerging and frontier markets. It is observed that COVID-19 confirmed cases negatively affect the stock return of all selected stock markets in the Asian region.

How to Cite: Kumarapperuma, O., Deyshappriya, N. P. R., & Rajapaksha, R. M. M. C. (2021). Impact of COVID-19 on Stock Return in Asian Stock Markets. South Asian Journal of Business Insights, 1(2), 24–42. DOI: http://doi.org/10.4038/sajbi.v1i2.26
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Published on 01 Dec 2021.
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