Effect of covid-19 on financial markets: Evidence from Pakistan, India and Italy

Abstract

The novel corona virus called as covid-19 spread worldwide affecting the health and economic status of countries all over the globe. The major aim of this study was to analyze the stock prices during the covid-19 pandemic. The sample of the study is taken from 15 May to 15 June 2020, stock prices as well as the covid-19 confirmed cases of three countries Pakistan, India and Italy. This study has both practical and theoretical implications. Investment behavior, efficient market hypothesis and the prediction of stock prices during the anticipated 2nd wave of covid-19 are some of the main points this study has covered. Further study is needed to examine pre, mid and post lockdown impact on stock prices. This study applied simple regression model to examine the impact of covid-19 on financial markets from 15 May to 15 June 2020 in Pakistan, India & Italy. The study findings were intriguing. The study findings indicate that there is positive significant relation among these variables (Positive cases and stock prices) on that period of time (15 May to 15 June 2020 in Pakistan, India & Italy). This research suggests that covid-19 confirmed positive cases had significant impact on financial markets during 15 May to 15 June 2020 on these three stock indices of Pakistan, India and Italy (KSE-100, SENSEX & FTSE Italia).