COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies

Yixiu Zhao; Min Hua

doi:doi:10.11648/j.ijefm.20210905.12

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COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies

Yixiu Zhao, Min Hua

Published in International Journal of Economics, Finance and Management Sciences (Volume 9, Issue 5)

Received: 8 September 2021 Accepted: 26 September 2021 Published: 29 September 2021

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Abstract

The coronavirus (COVID-19) pandemic is disrupting the world as we knew it, with a heavy toll on economic activities and the structure of politics. Governments, media websites, and research institutions update information about the changes in the COVID-19 epidemic every day. The most intuitive information may be the changes in the number of confirmed cases and deaths, which shape investors’ sentiments and confidence in the financial markets. The goal of this study is to investigate the impact of new mortality rates of COVID-19 on the UK and US stock markets over the period January 1 – September 30, 2020. We employed a simple regression model to examine whether new mortality rates contain information beyond the lagged market volatility. By constructing a lockdown dummy variable, we further control for the impact of government lockdown policies on market volatility in our model. Our findings show that new mortality rates caused by COVID-19 pandemic have significant positive impact on volatility of the UK and the US stock markets. We also find that the implementation of lockdown policies provided by the governments reduced the effects of new mortality rates on stock market volatility. In addition, our results are robust to other measurements of volatility. Together our findings suggest that new mortality rates do matter for stock market volatility of these two markets, and lockdown policies mitigate market volatile caused by new mortality rates.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 9, Issue 5)
DOI	10.11648/j.ijefm.20210905.12
Page(s)	178-182
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

COVID-19 Pandemic, Stock Market Volatility, Mortality Rates

References

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[8]	Baker, S. R., Bloom, N., Davis, S. J., Kost, K., Sammon, M., Viratyosin, T., 2020. The unprecedented stock market reaction to COVID-19. The Review of Asset Pricing Studies.
[9]	Heber, G., Lunde, A., Shephard, N., Sheppard, K., 2009. OMI’s realized library, version 0.3. Oxford-Man Institute, University of Oxford.
[10]	Baek, S., Mohanty, S. K., & Mina, G., 2020. COVID-19 and Stock Market Volatility: An Industry Level Analysis. Finance Research Letters, 101748.
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[15]	Narayan, P. K., Phan, D. H. B., Liu, G., 2020. COVID-19 lockdowns, stimulus packages, travel bans, and stock returns. Finance Research Letters. https://doi.org/10.1016/j.frl.2020.101732.

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APA Style

Yixiu Zhao, Min Hua. (2021). COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies. International Journal of Economics, Finance and Management Sciences, 9(5), 178-182. https://doi.org/10.11648/j.ijefm.20210905.12

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ACS Style

Yixiu Zhao; Min Hua. COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies. Int. J. Econ. Finance Manag. Sci. 2021, 9(5), 178-182. doi: 10.11648/j.ijefm.20210905.12

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AMA Style

Yixiu Zhao, Min Hua. COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies. Int J Econ Finance Manag Sci. 2021;9(5):178-182. doi: 10.11648/j.ijefm.20210905.12

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@article{10.11648/j.ijefm.20210905.12,
  author = {Yixiu Zhao and Min Hua},
  title = {COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {9},
  number = {5},
  pages = {178-182},
  doi = {10.11648/j.ijefm.20210905.12},
  url = {https://doi.org/10.11648/j.ijefm.20210905.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20210905.12},
  abstract = {The coronavirus (COVID-19) pandemic is disrupting the world as we knew it, with a heavy toll on economic activities and the structure of politics. Governments, media websites, and research institutions update information about the changes in the COVID-19 epidemic every day. The most intuitive information may be the changes in the number of confirmed cases and deaths, which shape investors’ sentiments and confidence in the financial markets. The goal of this study is to investigate the impact of new mortality rates of COVID-19 on the UK and US stock markets over the period January 1 – September 30, 2020. We employed a simple regression model to examine whether new mortality rates contain information beyond the lagged market volatility. By constructing a lockdown dummy variable, we further control for the impact of government lockdown policies on market volatility in our model. Our findings show that new mortality rates caused by COVID-19 pandemic have significant positive impact on volatility of the UK and the US stock markets. We also find that the implementation of lockdown policies provided by the governments reduced the effects of new mortality rates on stock market volatility. In addition, our results are robust to other measurements of volatility. Together our findings suggest that new mortality rates do matter for stock market volatility of these two markets, and lockdown policies mitigate market volatile caused by new mortality rates.},
 year = {2021}
}

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TY  - JOUR
T1  - COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies
AU  - Yixiu Zhao
AU  - Min Hua
Y1  - 2021/09/29
PY  - 2021
N1  - https://doi.org/10.11648/j.ijefm.20210905.12
DO  - 10.11648/j.ijefm.20210905.12
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 178
EP  - 182
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20210905.12
AB  - The coronavirus (COVID-19) pandemic is disrupting the world as we knew it, with a heavy toll on economic activities and the structure of politics. Governments, media websites, and research institutions update information about the changes in the COVID-19 epidemic every day. The most intuitive information may be the changes in the number of confirmed cases and deaths, which shape investors’ sentiments and confidence in the financial markets. The goal of this study is to investigate the impact of new mortality rates of COVID-19 on the UK and US stock markets over the period January 1 – September 30, 2020. We employed a simple regression model to examine whether new mortality rates contain information beyond the lagged market volatility. By constructing a lockdown dummy variable, we further control for the impact of government lockdown policies on market volatility in our model. Our findings show that new mortality rates caused by COVID-19 pandemic have significant positive impact on volatility of the UK and the US stock markets. We also find that the implementation of lockdown policies provided by the governments reduced the effects of new mortality rates on stock market volatility. In addition, our results are robust to other measurements of volatility. Together our findings suggest that new mortality rates do matter for stock market volatility of these two markets, and lockdown policies mitigate market volatile caused by new mortality rates.
VL  - 9
IS  - 5
ER  -

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Author Information

Yixiu Zhao

School of Economics and Management, Harbin Engineering University, Harbin, China
Min Hua

Faculty of Professional Finance & Accountancy, Shanghai Business School, Shanghai, China

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Plain Text BibTeX RIS

APA Style

Yixiu Zhao, Min Hua. (2021). COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies. International Journal of Economics, Finance and Management Sciences, 9(5), 178-182. https://doi.org/10.11648/j.ijefm.20210905.12

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ACS Style

Yixiu Zhao; Min Hua. COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies. Int. J. Econ. Finance Manag. Sci. 2021, 9(5), 178-182. doi: 10.11648/j.ijefm.20210905.12

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AMA Style

Yixiu Zhao, Min Hua. COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies. Int J Econ Finance Manag Sci. 2021;9(5):178-182. doi: 10.11648/j.ijefm.20210905.12

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@article{10.11648/j.ijefm.20210905.12,
  author = {Yixiu Zhao and Min Hua},
  title = {COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {9},
  number = {5},
  pages = {178-182},
  doi = {10.11648/j.ijefm.20210905.12},
  url = {https://doi.org/10.11648/j.ijefm.20210905.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20210905.12},
  abstract = {The coronavirus (COVID-19) pandemic is disrupting the world as we knew it, with a heavy toll on economic activities and the structure of politics. Governments, media websites, and research institutions update information about the changes in the COVID-19 epidemic every day. The most intuitive information may be the changes in the number of confirmed cases and deaths, which shape investors’ sentiments and confidence in the financial markets. The goal of this study is to investigate the impact of new mortality rates of COVID-19 on the UK and US stock markets over the period January 1 – September 30, 2020. We employed a simple regression model to examine whether new mortality rates contain information beyond the lagged market volatility. By constructing a lockdown dummy variable, we further control for the impact of government lockdown policies on market volatility in our model. Our findings show that new mortality rates caused by COVID-19 pandemic have significant positive impact on volatility of the UK and the US stock markets. We also find that the implementation of lockdown policies provided by the governments reduced the effects of new mortality rates on stock market volatility. In addition, our results are robust to other measurements of volatility. Together our findings suggest that new mortality rates do matter for stock market volatility of these two markets, and lockdown policies mitigate market volatile caused by new mortality rates.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - COVID-19 Pandemic: Stock Markets Reaction to the Mortality Rates and Lockdown Policies
AU  - Yixiu Zhao
AU  - Min Hua
Y1  - 2021/09/29
PY  - 2021
N1  - https://doi.org/10.11648/j.ijefm.20210905.12
DO  - 10.11648/j.ijefm.20210905.12
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 178
EP  - 182
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20210905.12
AB  - The coronavirus (COVID-19) pandemic is disrupting the world as we knew it, with a heavy toll on economic activities and the structure of politics. Governments, media websites, and research institutions update information about the changes in the COVID-19 epidemic every day. The most intuitive information may be the changes in the number of confirmed cases and deaths, which shape investors’ sentiments and confidence in the financial markets. The goal of this study is to investigate the impact of new mortality rates of COVID-19 on the UK and US stock markets over the period January 1 – September 30, 2020. We employed a simple regression model to examine whether new mortality rates contain information beyond the lagged market volatility. By constructing a lockdown dummy variable, we further control for the impact of government lockdown policies on market volatility in our model. Our findings show that new mortality rates caused by COVID-19 pandemic have significant positive impact on volatility of the UK and the US stock markets. We also find that the implementation of lockdown policies provided by the governments reduced the effects of new mortality rates on stock market volatility. In addition, our results are robust to other measurements of volatility. Together our findings suggest that new mortality rates do matter for stock market volatility of these two markets, and lockdown policies mitigate market volatile caused by new mortality rates.
VL  - 9
IS  - 5
ER  -

Copy | Download