Abstract
Background/Objectives: The Coronavirus disease in 2019 (COVID-19) was first seen in Wuhan (capital of Hubei, Chain), and has since spread throughout the world, resulting in the World Health Organisation (WHO) declaring the 2019–20 coronavirus a pandemic. Its ongoing spread has resulted in a standstill of the world’s economy, total lockdown in some counties, closedown of business and firms globally. As of 25th Mar 2020, 11:00 am GMT, a total of 491,280 cases were reported globally. The evolution of COVID-19 and its economic impact on the regional financial markets are highly uncertain, which makes it difficult for legislators to formulate a suitable macroeconomic strategy response.Methods: To ascertain the possible economic impact of COVID-19 globally, this study examines the effect of COVID-19 on major stocks indices across the globe. Using a random sampling technique, we selected thirty (30) world stock market indices in different countries infected with COVID-19 from 31st Dec 2019 to 25th Mar 2020. However, not like a high percentage of previous studies that focus on the regional stock market, we examine the information on daily reported COVID-19 cases and stock market fluctuation over thirty stock market indices that houses the stock prices of several countries around the globe. Also, we estimate the monetary loss within the period, project the future surge of this pandemic on the stock market and outline some portfolio allocation strategies to help the investor hedge against investment risk. Findings: The experimental results in this study show that even a controlled outbreak of the COVID-19 can significantly influence the world’s economy in both the short-term and longterm. Our obtained results of COVID-19 associated economic loss echoed in stock prices movements advise that the cost can escalate severely and quickly into global economic stress. Hence, we conclude by outlining some measure that might help investors hedge against such risk using portfolio allocation strategies. Keywords: Coronavirus; COVID-19; Stock market; stocks price; pandemic; machine-learning; economic impact of COVID-19
Highlights
The stock market is one of the financial markets that receive several investments daily due to its associated benefits and gains[1,2,3,4]
We estimate the monetary loss within the period, project the future surge of this pandemic on the stock market and outline some portfolio allocation strategies to help the investor hedge against investment risk
Literature has shown that the stock market is affected by several factors; but previous studies were focused on analysing market volatility against public sentiments, historical stock price, financial news, and search engine queries
Summary
The stock market is one of the financial markets that receive several investments daily due to its associated benefits and gains[1,2,3,4]. Its stochastic nature is believed to be influenced by several factors ranging from political, economic instability, investors and public sentiments, the board of directors of firms, firms financial status and economic standing[1,2]. Several academic studies have attempted to examine the predictability and influence of these factors on the stock market volatility. The following studies [4,6,7,8,9] examined the effect of public sentiment in tweets from Twitter on the stock market volatility. The results from these studies show a higher association between tweets and the stock market. In other studies [4,18,19,20], it was shown that google search queries could effectively communicate the volatility of the stock market
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