An investigative analysis of the impact of Covid 19 on the Indian share market

Abstract

The share prices respond to the information available in the public domain at the same time. It is reflected in the indices of the stock exchanges. We can say that any action of a large scale taken by the government or any reputed institutions has a direct impact on the share market, be it positively or negatively. In such a situation it becomes inevitable for an investor to know based on experience how the market reacts to similar past events. To safeguard the financial loss which may arise as it becomes very much essential to study such events. Such an event is the declaration of coronavirus or Covid19 as a pandemic by the World Health Organisation; pandemic implies that it has an impact on large geographical areas worldwide. Thus to study the risk of covid19 as a pandemic declaration on the Indian stock market this study has been carried out. Four sectoral and two thematic indices were taken for the study. Event study methodology has been used for the study. The Average Abnormal Return and Cumulative Average Abnormal Return of the -20 trading days and +20 of post and pre-event data have been studied. On AAR there is no difference in pre and post-event while in CAAR there is significance. While in the individual index Nifty Pharma and Nifty Energy have significance.