Catastrophic impact of Covid‐19 on the global stock markets and economic activities

Abstract This paper intends to know the influence of COVID‐19 on the stock markets and economic activities across the world. To achieve the purpose, daily panel data of 12 selective countries covering four continents from January to April 2020 have been collected. The impact on stock markets has been measured by applying the event study method, while the panel vector autoregressive model has been applied to measure the impact on economic activities. The stock index of each country, purchasing managers’ index, COVID‐19 variables, namely the number of lockdown days, restriction in internal movement, restriction in international travel, fiscal measure, and confirmed cases have been used. The study observes the serious negative impact of the pandemic on stock market returns. European…