Sectorial Impact Of Covid19 On Indian Capital Market

Abstract

This paper attempts to examine the impact of COVID19 on various sectoral indices of Indian capital market and also to examine correlation between no. of deaths due to COVID19 and stock market behvaiour and correlation between no. of infections of COVID19 and stock market behvaiour. 11 sectoral indices have been chosen along with Nifty50. Average of the daily opening and closing prices are considered for calculating returns.  The opening and closing prices of the indices chosen for the current study are collected from the nseindia website. The time frame of the current study is from 1^st March 2020 to 31^st June 2020. 

The stock market behaviour during the post COVID19 was huge volatile.  Only during the first one or two weeks the market was performing negatively but at later stage it recovered and reacted with wide fluctuations. The sector most affected by the COVID19 was banking sector particularly PSU banks, followed by realty, auto, media so on. The sectors least affected were IT and pharma sectors. Though stock market reacted negatively for some days, there is no perfect correlation between COVID19 and stock market movement. The reason for the negative movement of the market was not COVID19 alone, it was accompanied by other factors such as Yes bank crisis.  Though stock market reacted negatively during post COVID19, it bounced back when the central govt. announced some relief packages.