What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?

This paper isolates the different effects of COVID-19 on the stock market returns and identifies the channels through which each of the effects influences the returns. Using a sample of twelve countries with most liquid stock markets, we find that the panic caused by the pandemic affects the stock r...

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Detalles Bibliográficos
Autores principales: Aggarwal, Shobhit, Nawn, Samarpan, Dugar, Amish
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier Inc. 2021
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9761186/
https://www.ncbi.nlm.nih.gov/pubmed/36569652
http://dx.doi.org/10.1016/j.frl.2020.101827
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author Aggarwal, Shobhit
Nawn, Samarpan
Dugar, Amish
author_facet Aggarwal, Shobhit
Nawn, Samarpan
Dugar, Amish
author_sort Aggarwal, Shobhit
collection PubMed
description This paper isolates the different effects of COVID-19 on the stock market returns and identifies the channels through which each of the effects influences the returns. Using a sample of twelve countries with most liquid stock markets, we find that the panic caused by the pandemic affects the stock return negatively through the updation of market risk premium channel. The stringency of the lockdown has a two-way effect on the stock market returns, whereas it affects the return negatively through the updation of growth forecasts, it also affects the return positively through the updation of market risk premium.
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spelling pubmed-97611862022-12-19 What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic? Aggarwal, Shobhit Nawn, Samarpan Dugar, Amish Financ Res Lett Article This paper isolates the different effects of COVID-19 on the stock market returns and identifies the channels through which each of the effects influences the returns. Using a sample of twelve countries with most liquid stock markets, we find that the panic caused by the pandemic affects the stock return negatively through the updation of market risk premium channel. The stringency of the lockdown has a two-way effect on the stock market returns, whereas it affects the return negatively through the updation of growth forecasts, it also affects the return positively through the updation of market risk premium. Elsevier Inc. 2021-01 2020-11-02 /pmc/articles/PMC9761186/ /pubmed/36569652 http://dx.doi.org/10.1016/j.frl.2020.101827 Text en © 2020 Elsevier Inc. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Aggarwal, Shobhit
Nawn, Samarpan
Dugar, Amish
What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?
title What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?
title_full What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?
title_fullStr What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?
title_full_unstemmed What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?
title_short What caused global stock market meltdown during the COVID pandemic–Lockdown stringency or investor panic?
title_sort what caused global stock market meltdown during the covid pandemic–lockdown stringency or investor panic?
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9761186/
https://www.ncbi.nlm.nih.gov/pubmed/36569652
http://dx.doi.org/10.1016/j.frl.2020.101827
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