Short term response of Chinese stock markets to the outbreak of COVID-19

Impact of the coronavirus pandemic crisis on the financial system in the eurozone

“…Liu, Wang, He, and Wang (2020) find that “both the Chinese and Asian stock markets had significantly declined, with the cumulative abnormal returns (CAR) remaining negative in all the examined event window periods by using event study method to calculate the abnormal returns in the 10 trading days following the outbreak.” Zaremba, Kizys, Aharon, and Demir (2020) demonstrate that “non‐pharmaceutical interventions significantly increase equity market volatility. The effect is independent from the role of the coronavirus pandemic itself and is robust to many considerations.” Tokic (2020) conclude that the COVID‐19 pandemics is likely to accelerate the trends of deglobalization and dedollarization and to creates an opportunity for building a new trend of more sustainable globalization.…”

GARCH Effect and Abnormal Returns during COVID-19 Pandemic

“…Such individual investor perceptions then spread through 'group psychology' which can eventually lead to fluctuations in the stock market. Therefore, panicked investor behavior can damage the market and reduce equity in affected stock markets [12], which will impact individual and institutional investors and lead to stock market decline in Indonesia.…”

“…A number of researchers have shown that COVID-19 impacts on abnormal returns [8], [9], [10], [11]. Likewise, a study conducted by [12] found that the COVID-19 outbreak had an impact on both the Chinese and Asian stock markets as indicated by a significant decrease in cumulative abnormal return (CAR) and remained negative across all event window periods examined. These results reflect investors' expectations for the economy in the face of a contagious health virus outbreak.…”

Can Uncertainty Due to Pandemic Predict Asia-Pacific Energy Stock Markets?

“…First, the current COVID-19 pandemic has shown that stock markets and financial markets of many countries are sensitive to the pandemic (see, Bouri et al, 2020). Second, uncertainty that created by pandemics that impact health have significant influence on investors' actions (Baker et al, 2020) and sentiments (HaiYue et al, 2020). Lastly, uncertainty due to the pandemic might restrain the demand for energy which subsequently leads to fall in stock prices and returns (see .…”