The COVID-19 outbreak and stock market reactions: Evidence from Australia

Md Lutfur Rahman, Abu Amin*, Mohammed Abdullah Al Mamun

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    109 Citations (Scopus)

    Abstract

    We examine how the Australian stock market responded to the uncertainties created by the COVID-19 pandemic and whether the stimulus package offered by the Government helped restore confidence in the market. This study finds a negative stock market reaction to the pandemic announcement, however, among two stimulus packages related announcements, the market reacted positively only to “JobKeeper” package. The cross-sectional results suggest that the smallest, least profitable and value portfolios suffered more during the pandemic. Finally, size and liquidity are found to be the significant drivers of abnormal returns. These results generally hold for a battery of robustness checks.
    Original languageEnglish
    JournalFinance Research Letters
    Volume38
    DOIs
    Publication statusPublished - Jan 2021

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