How stock markets reacted to COVID-19? Evidence from 25 countries

The objective of this paper is to analyse how COVID-19 related government policies influenced stock markets. Of the 25 countries we consider, stock returns did not react to any of the three policies - the stimulus package, lockdown, and travel ban in 20% of countries. For around 48% of countries, the effect on returns was negative, due largely to the stimulus package and lockdown policies. Of the 13 countries that experienced a change in the cash rate, returns were negative for 46% of the markets. The travel ban had the least effect on stock returns.