Assessing the Impact of COVID-19 Pandemic on the Stock and Commodity Markets Performance and Sustainability: A Comparative Analysis of South Asian Countries

Abstract

COVID-19 is certainly the first sustainability crisis of the 21st century. The paper examines the impact of COVID-19 on the Indian stock and commodity markets during the different phases of lockdown. In addition, the effect of COVID-19 on the Indian stock and commodity markets during the first and second waves of the COVID-19 spread was compared. A comparative analysis of the stock market performances and sustainability of selected South Asian countries is also included in the study, which covers the lockdown period as well as the time frame of the first and second waves of COVID-19 spread. To examine the above relationship, the conventional Welch test, heteroskedastic independent t-test, and the GMM multivariate analysis is employed, on the stock return, gold prices, and oil prices. The findings conclude that during the different phases of lockdown in India, COVID-19 has a negative and significant impact on oil prices and stock market performance. However, in terms of gold prices, the effect is positive and significant. The results of the first wave of COVID-19 infection also corroborate with the above findings. However, the results are contradictory during the second wave of coronavirus infection. Furthermore, the study also substantiates that COVID-19 has significantly affected the stock market performances of selected South Asian countries. However, the impact on the stock market performances was only for a short period and it diminished in the second wave of COVID-19 spread in all the selected South Asian countries. The findings contribute to the research on the stock and commodity market impact of a pandemic by providing empirical evidence that COVID-19 has spill-over effects on stock markets and commodity market performances. This result also helps investors in assessing the trends of the stock and commodity markets during the pandemic outbreak.