scholarly journals COVID-19 Pandemic and Investor Herding in International Stock Markets

Risks ◽  
2021 ◽  
Vol 9 (9) ◽  
pp. 168
Author(s):  
Elie Bouri ◽  
Riza Demirer ◽  
Rangan Gupta ◽  
Jacobus Nel
Keyword(s):  
Infectious Diseases ◽  
Financial Markets ◽  
Stock Markets ◽  
Investor Sentiment ◽  
Market Uncertainty ◽  
Herding Behavior ◽  
Market Participants ◽  
Hedging Strategies ◽  
Global Stock Markets ◽  
Global Stock

The aim of this study is to understand the effect of the recent novel coronavirus pandemic on investor herding behavior in global stock markets. Utilizing a daily newspaper-based index of financial uncertainty associated with infectious diseases, we examine the association between pandemic-induced market uncertainty and herding behavior in a set of 49 global stock markets. More specifically, we study the pattern of cross-sectional market behavior and examine whether the pandemic-induced uncertainty drives directional similarity across the global stock markets that cannot be explained by the standard asset pricing models. Utilizing a time-varying variation of the static herding model, we first identify periods during which herding is detected. We then employ probit models to examine the possible association between pandemic-induced uncertainty and the formation of herding. Our findings show a strong association between herd formation in stock markets and COVID-19 induced market uncertainty. The herding effect of COVID-19 induced market uncertainty is particularly strong for emerging stock markets as well as European PIIGS stock markets that include some of the hardest hit economies in Europe by the pandemic. The findings establish a direct link between the recent pandemic and herd formation among market participants in global financial markets. Considering the evidence that herding behavior can drive security prices away from equilibrium values supported by fundamentals and further contribute to price fluctuations in financial markets, our findings have significant implications for policy makers and investors in their efforts to monitor investor sentiment and mitigate mis-valuations that might occur as a result. Furthermore, the evidence on the behavioral pattern of stock investors in relation to infectious diseases uncertainty can be useful in studying price discovery in stock markets and might help market participants in forming hedging strategies to mitigate downside risk in their investment portfolios.

Review of top five financial markets during the pandemic times

2021 ◽  
pp. 2131001
Author(s):  
Tahir Mumtaz Awan ◽  
Jamal Maqsood
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Market News ◽  
Stock Markets ◽  
Stock Exchanges ◽  
Future Market ◽  
Virus Origin ◽  
The World ◽  
Global Stock Markets ◽  
Global Stock

The purpose of this paper is to jot down the devastating impacts of COVID-19 towards the top five financial markets of the world and to see how they reacted back in different phases of COVID-19 from start till July 2020. The review is based on the financial market news, blogs, the governmental, and other financial bodies’ websites. The effects of the pandemic are like the damage never seen before in a much shorter time, vanishing a quarter portion of wealth in about a month and creating continuous uncertainties for investors throughout. China despite being the virus origin still performed well and better among all top markets whereas the rest all the stock exchanges remained inconsistent. This paper is the first of its kind to review the COVID-19 effects on the top five global stock markets and the governmental responses towards them. The study along with contributing to the existing literature is also assisting investors, analysts, specialists, and authorities to analyze their opinions w.r.t. stock markets performances, government responses, and their future market-related decisions.

scholarly journals Sentiment Analysis of COVID-19 Pandemic on the Stock Market

2021 ◽  
Vol 24 (1) ◽  
pp. 141-165
Author(s):  
Prajwal Eachempati ◽  
Praveen Ranjan Srivastava ◽  
Prabin Kumar Panigrahi
Keyword(s):  
Financial Markets ◽  
Investor Sentiment ◽  
The Other ◽  
Global Markets ◽  
Learning Approach ◽  
Global Pandemic ◽  
Machine Learning Approach ◽  
Long Time ◽  
Global Stock Markets ◽  
Global Stock

COVID-19 is a dreadful infectious disease, morphed into an economic crisis causing extensive and longstanding ramifications across global markets. Investors continue to hear about COVID-19 and its impact in one corner of the globe or the other for a long time. Though the effects of COVID19 started in December 2019 in Wuhan, China, global markets did not respond actively till W.H.O officially declared on March 11, 2020, that the COVID19 outbreak is a global pandemic. These multi-channel events have eroded investor sentiment, tanking the global stock markets. This article uses a machine learning approach to Twitter to analyze and follow investor sentiment that has guided the market to the new low during the first 150 days of the COVID-19 era. The only respite for recovery of financial markets is the lowering of COVID-19 infected cases for the time being till a vaccine is developed for the virus.

China turmoil augurs badly for global markets

2016 ◽  
Keyword(s):  
Financial Markets ◽  
Composite Index ◽  
Investor Sentiment ◽  
Global Markets ◽  
Content Type ◽  
The Us ◽  
Global Stock Markets ◽  
Equity Index ◽  
Effectiveness Of Monetary Policy ◽  
Global Stock

Subject China's financial turmoil and its impact on global markets. Significance The renewed turmoil in China's financial markets in the first trading days of 2016 has undermined investor sentiment, wiping 2.3 trillion dollars off the value of global stock markets and leading to a surge in demand for safe-haven assets. While the Shanghai Composite index rebounded on January 8, it dropped again on January 11 by 5.3%, dragging down the US S&P 500 equity index, which dropped 6% in the first trading week of 2016, its worst start to the year on record and a sign of the extent to which China has become the most important sentiment determinant. Impacts The credibility of Chinese policymaking is undermined, heightening concerns about the country's slowdown and auguring badly for many EMs. Central banks will be another source of volatility, especially if investors lose confidence in the effectiveness of monetary policy. A weaker-than-expected dollar will pressure the ECB further to provide more monetary stimulus.

Winter Is Coming: Repercussions of a New COVID-19 Wave in Global Stock Markets

2020 ◽  
Author(s):  
Panagiotis Lazaris ◽  
Anastasios Petropoulos ◽  
Vasileios Siakoulis ◽  
Evangelos Stavroulakis ◽  
Nikos Vlachogiannakis ◽  
...  
Keyword(s):  
Stock Markets ◽  
Global Stock Markets ◽  
Global Stock

COVID-19 and overconfidence bias: the case of developed, emerging and frontier markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vijay Kumar Shrotryia ◽  
Himanshi Kalra
Keyword(s):  
Stock Markets ◽  
Impulse Response Functions ◽  
Economic Activities ◽  
Content Type ◽  
Long Run ◽  
Governance Practices ◽  
Global Stock Markets ◽  
Developed Stock Markets ◽  
Overconfidence Bias ◽  
Global Stock

PurposeThe main purpose of the present study is to delve into the overconfidence bias in global stock markets during both pre COVID-19 and COVID-19 phases.Design/methodology/approachThe present study makes use of daily adjusted closing prices and volume of the broad market indices of 46 global stock markets over a period ranging from July 2015 till June 2020. The sample period is split into pre COVID-19 and COVID-19 phases. In order to test the overconfidence fallacy in the chosen stock markets, bivariate market-wide vector auto regression (VAR) models and impulse response functions (IRFs) have been employed in both phases.FindingsA highly significant contemporaneous relationship between market return and volume appears to be more pronounced in the Japanese, US, Chinese and Vietnamese stock markets in the pre COVID-19 era for the relevant coefficients are positive and highly significant for most lags. Coming to the period of turbulence, the present study discovers strong overconfident behavior in the Chinese, Taiwanese, Turkish, Jordanian and Vietnamese stock markets during COVID-19 phase.Practical implicationsA stark finding is that none of the developed stock markets reveal strong overconfidence bias during pandemic, suggesting a loss or decline in the investors' confidence. Therefore, the regulators should try to regain the investors' trust and confidence in the markets by ensuring honest, fair and transparent practices. The money managers should reduce the transaction cost to encourage trading and educate investors to hold a well-diversified portfolio to mitigate risk in the long run. The governments may launch recovery packages focusing on sustaining and improving economic activities. Finally, a better investment culture may be built by the corporate houses through good corporate governance practices to regain lost trust.Originality/valueThe present study appears to be the very first attempt to gauge overconfidence bias in the wake of a recent COVID-19 pandemic.

COVID-19 Vaccines: Saving Lives and the Global Stock Markets

2021 ◽  
Author(s):  
Kam Fong Chan ◽  
Zhuo Chen ◽  
Yuanji Wen ◽  
Tong Xu
Keyword(s):  
Stock Markets ◽  
Global Stock Markets ◽  
Global Stock
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