ABSTRACT
The COVID-19 pandemic has changed the world, transmuting our lives, our economies, and the fortunes of our businesses, an unfolding journey that has been reflected in the ups and downs of the financial markets across the globe. The spread of coronavirus created unprecedented panic and uncertainty among investors inducing them to react immediately with a pessimistic attitude, as a result, dramatically affecting stock markets around the world. This study attempts to examine the impact of the COVID-19 outbreak on the stock markets of selected Asian countries by using event study methodology to measure abnormal returns, and Generalised Auto Regressive Conditional Heteroskedasticity (GARCH) model to measure volatility clustering. The sample consists of indices of selected Asian economies: India, China, Hong Kong, Japan and Singapore. To conduct the analysis, a 90-day event window is considered pre and post-COVID-19 outbreak news release in the international media. The results show the significant negative effect of coronavirus as market uncertainties and panic 178investors’ sentiments amid the pandemic triggered immediate negative abnormal returns and increased market volatilities. This has vital implications for stock market regulators and government authorities to intervene to minimise the destructive impact of any turbulence on the economy.
