COVID-19 and Stock Market Behaviors: Evidence from Countries in Asia, Europe, North America and South Africa

This study explores the impact of COVID-19 on the stock market from 22nd January 2020 to 19th July 2021. We select 12 worst-hit and representative countries from 4 continents worldwide including China, Japan, Russia, India, United Kingdom, Germany, France, Italy, Spain, United States, Canada and South Africa. By using panel data model, we find both the new confirmed case and total vaccinations have negative effect on the stock index returns. The government interventions positively affect the stock market. Central banks are better to apply moderate numbers of financial tools since countries response at median level gain higher returns than countries response at low level and high level. The Coronavirus Panic Index and the Coronavirus Media Coverage Index show significant positive effect on stock returns.