Covid Cases and Irregularity in Emerging Markets: GARCH Modelling Approach

Unpredicted volatility has been the major trend in the financial market as an outcome of Covid-19. Although financial needs are maintained through financial institutions, the world witnessed sharp uncertainty due to the disturbances that occurred in the global economy. In previous years, Indian Stock Markets crashed many times, and one such instance occurred in 2008-2009 caused by subprime lending crises when markets fell almost 60%. Although global markets were still recovering, Indian Stock Markets saw a bull run in the previous few years. Like all other sectors, financial markets have also been confronting high unpredictability due to the Covid-19 Pandemic. The paper aims to review the impact of Covid-19 on the Stock Markets of BRICS nations using GARCH Model. The results revealed that there is a negative relations between index value and COVID cases of India and South Africa whereas China, Brazil and Russia had a positive relation between Covid cases and Index values. Although the impact of increase in covid cases was very less on Indian stock market. Later a model of the volatility in different stock markets was formed. Volatility in different stock markets is because of historical closing prices and not because of previous day’s volatility.