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Impact of COVID-19 Pandemic on Stock Market: Evidence from Bombay Stock Exchange

Mahesh Dahal, Joy Das


The present study attempts to examine the behavior of the Indian stock market during the COVID 19 pandemic. In the study, a systemic approach is undertaken, where three significant events, namely declaration of COVID 19 as a pandemic, first death in India by COVID 19 and imposition of the nationwide lockdown, have been considered and the market reaction around the events is studied. The study employed event study methodology with daily return series of hundred and one firms, constituting the BSE 100 index. The study observed that the investors did not provide much attention to the announcement of the COVID 19 as a pandemic. However, the investors started panicking after the first death by the pandemic was reported, as witnessed from the negative abnormal returns—the return further declined on the announcement of nationwide lockdown. However, the sectors like FMCG, Health and Technology earned an abnormal positive return on the announcement of the nationwide lockdown. The study further employed GARCH Model and observed high volatility in the return series during the events. Overall, the study concludes that the events have a significant negative impact on the Indian stock market.


COVID 19 Pandemic, Indian Stock Market, Event Study Methodology, GARCH

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