CORONAVIRUS (COVID-19) AND STOCK MARKETS: THE EFFECTS OF THE PANDEMIC ON THE GLOBAL ECONOMY

Abstract

The novel coronavirus (COVID-19) virus, which emerged in Wuhan City, Hubei Province of China, spread to other countries over time and was declared a global epidemic by the World Health Organization (WHO) on March 11, 2020.With the epidemic, curfews were imposed, workplaces closed, production decreased, shopping stopped, except for basic supplies.COVID-19 endangered human health as well as increased risk perception in financial markets.Large decreases occurred in stock markets in a short time, companies lost value, stock prices dropped.This study investigates the effect of COVID-19 outbreak on global markets between January 21, 2020 and April 7, 2020.Global markets are represented by Morgan Stanley Capital International (MSCI)' World, emerging market, European and G7 indices.Fourier Cointegration test detects that a long-term relationship between stock markets and COVID-19.

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