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Archive » October 2020 » The Covid-19 crisis: impacts and risks for the financial markets

The Covid-19 crisis: impacts and risks for the financial markets

Valeria Caivano, Francesco Fancello, Monica Gentile, Nadia Linciano
October 2020 - n. 10
Keywords: Covid-19, crisi, mercati finanziari
Jel codes: I10, G10

The Covid-19 pandemic is an epochal event whose fallout will make global economy suffer for years to come. Last March, the uncertainty about the economic outlook and the increase of investors’ risk aversion triggered large drops in stock markets prices and a significant increase in volatility. The recovery recorded over the subsequent months was driven by the robust responses envisaged by policy makers and appears heterogeneous across sectors and areas. This paper investigates stock market trends following the outburst of the crisis at a global level and explores the dynamics of interconnections and spillovers across markets as well as the possible misalignment between prices and fundamentals of listed companies.

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