Effect of Covid 19 and subsequent lockdown on Indian stock market

Abstract

The spread of novel virus COVID -19 was a pandemic that affected the whole world. It affected different sectors of the economy. When looking into the financial sector, stock market is one economic indicator which shows the position of the country. This paper tries to find the impact of pandemic on stock market performance in Indian stock market. The data of NSE 500 listed companies were taken for the study. The effect of total covid cases total active cases and total death cases on stock market were studied. The paper tries to examine the factors affecting the stock market performance in the lockdown phase. To get a better understanding, the pre-lockdown phase, lockdown phase and post lockdown phase is taken into consideration. Random effect panel data regression model was used to do the analysis. The findings show that the active cases have an impact on the stock market performance, whereas total covid cases and total death cases do not have an impact on the stock market performance. The factors beta, turnover, market capitalization, price to earnings value have an impact on the stock market performance during the lockdown phases. Out of the eight market specific factors market capitalization and turnover are the factors which are time variant. They have a change from the pre-lockdown phase to the lockdown phase.