HOW COVID-19 AND GOVERNMENT ACTIONS AFFECTED STOCK INDEXES

Abstract

The COVID-19 virus created a health crisis that led to one of the biggest economic crises in the world. This study analyzes the effects of different variables on the stock indexes of 15 different countries grouped into five areas/regions: Europe, the United States, South America, New Zealand, and Asia. The variables include data regarding COVID-19 on infections and death as well as news regarding government actions. The descriptive statistics and the regression analysis expose differences between the areas across all the variables. The variables with the strongest effects are the number of infected people and the number of recoveries, except for South America where only the number of infected people had the strongest effect. In addition, in the United States and New Zealand, infection of famous people and/or people in key positions is the most significant variable, while in Asia and South America it was the behavior of the public and in Europe it was the restrictions on the education system.