Impact of First Wave of Covid-19 Pandemic on Stock Returns: Evidence from the Indian Stock Market

Abstract

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.