Parsing the Performance of Stock Market Indices Amidst COVID-19 and Russia-Ukraine War: A Comparative Study of DSEX, Nifty-50, and KSE-100

Abstract

The primary objective of this investigation is to assess the performance of the benchmark indices in the stock markets of Bangladesh, India, and Pakistan, denoted by DSEX (Dhaka Stock Exchange Broad Index), Nifty-50 (National Stock Exchange Fifty), and KSE-100 (Karachi Stock Exchange 100 Index), respectively. Data is meticulously gathered across distinct periods, namely the pre-COVID, the COVID-19, and the concurrent COVID-19 era along with the Russia-Ukraine War period, and amid the consequent global ongoing financial crises. The study encompasses information spanning from July 2, 2013 to May 9, 2023, employing descriptive statistics, where both mean returns and risk-adjusted returns were calculated consecutively. The evaluation of diversification among the indices during the specified periods is conducted through descriptive statistics and Ordinary Least Squares (OLS) estimation. The findings of this study indicate that all the indices exhibited negative mean returns during the COVID-19 phase. Furthermore, both mean returns and risk-adjusted returns of the indices witnessed substantial increments amid the inflationary environment concurrent with the COVID-19 and Russia-Ukraine War periods. OLS estimation results suggest an absence of a discernible diversification relationship among the indices. In summary, our results underscore the dynamic nature of index prices across diverse temporal and global crisis scenarios. These implications offer valuable insights for investors and stockholders, enabling them to discern hedging opportunities and identify diversifiable indices within the global stock markets across disparate periods and crises.