The Impact of the Covid-19 Pandemic on Financial Markets on Selected Developed Countries

Abstract

Studies cannot provide adequate predictions regarding the depth and length of the Covid-19 virus because the Covid-19 pandemic is an unprecedented epidemic in terms of the lack of data gathered so far. The measures taken by governments and the deterioration of human health conditions have affected all sectors; especially production, distribution, and supply chains. The sector most severely inflicted by the epidemic is the financial markets. This study examined the effects of Covid-19 cases and CDS (Credit Default Swap) premiums on financial markets benefitting from the daily data collected between February 3, 2020, and September 20, 2021. As a result, it was seen that Covid-19 cases and CDS premiums posed a negative impact on stock market indices in selected countries (England, France and the United States). The country with the highest impact of Covid-19 cases on stock market indices is England. The country with the lowest CDS premiums on stock market indices is England and the country with the highest is the United States. More strikingly, the negative impact posed by CDS premiums on stock market returns due to the uncertainty of the epidemic was analyzed to be stronger than that posed by Covid-19 cases. Thus, governments should develop policies to reduce pandemicinduced uncertainty in the financial markets. DOI: https://dergipark.org.tr/tr/pub/nevsosbilen/article/914921 Atıf/Cite as: Kuloğlu, A. (2022). The impact of the covid-19 pandemic on financial markets on selected developed countries.