Impact of COVID-19 on Stock Market and Gold Returns in India
The spread of COVID-19 has caused severe damage to human lives and the global economy. The stock markets around the world have plummeted to their lowest levels since the 2008 Global Financial Crisis. This paper attempts to examine the joint dynamics of gold and stock market returns during unprece...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Ala-Too International University
2021-05-01
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| Series: | Eurasian Journal of Business and Economics |
| Subjects: | |
| Online Access: | https://ejbe.org/EJBE2021Vol14No27p029-MAHAJAN-MAHAJAN.pdf |
| Summary: | The spread of COVID-19 has caused severe damage to human lives and the global
economy. The stock markets around the world have plummeted to their lowest levels
since the 2008 Global Financial Crisis. This paper attempts to examine the joint
dynamics of gold and stock market returns during unprecedented times of health and
financial shock due to COVID-19 between January 2020 and May 2020 using granger
test, ARMA model, and symmetric and asymmetric GARCH models to improve the
understanding of the microstructure of investment scenario in India. The period
considered in the study helps to evaluate the impact of lockdown due to coronavirus
on Gold and Nifty index return. Results based on GARCH and E-GARCH models
indicate a significant negative impact of gold on nifty returns during the sample
period. The results also indicate investors' perception of gold as a safe-haven asset
during periods of elevated uncertainty. Thus, the study is expected to enhance the
understanding of market asymmetry, the behavior of investors towards these
avenues of investments, and information processing. |
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| ISSN: | 1694-5948 1694-5948 |