COVID-19: Media coverage and financial markets behavior-A sectoral inquiry

Omair Haroon; Syed Aun R Rizvi

doi:10.1016/j.jbef.2020.100343

COVID-19: Media coverage and financial markets behavior-A sectoral inquiry

J Behav Exp Finance. 2020 Sep:27:100343. doi: 10.1016/j.jbef.2020.100343. Epub 2020 May 15.

Authors

Omair Haroon¹, Syed Aun R Rizvi¹

Affiliation

¹ Suleman Dawood School of Business, Lahore University of Management Sciences (LUMS), Lahore, Pakistan.

Abstract

We analyze the relationship between sentiment generated by coronavirus-related news and volatility of equity markets. The ongoing coronavirus outbreak (COVID-19) resulted in unprecedented news coverage and outpouring of opinions in this age of swift propagation of information. Ensuing uncertainty in financial markets leads to heightened volatility in prices. We find that overwhelming panic generated by the news outlets are associated with increasing volatility in the equity markets. Our results for individual economic sectors demonstrate that panic-laden news contributed to a greater extent to volatility in the sectors perceived to be most affected by coronavirus outbreak.