Zero-COVID policy and stock market sectoral performance in China

Author:

Sharma Prashant1ORCID,Kumar Surender2ORCID

Affiliation:

1. FPM, Associate Professor, Jaipuria Institute of Management, Noida

2. Ph.D., Assistant Professor, Jaipuria Institute of Management, Noida

Abstract

With the outbreak of COVID-19, the Chinese government implemented the “zero-COVID” policy as a measure to curb the spread of the virus. The different measures of the policy include widespread testing, contact tracing, and strict quarantine and isolation protocols. In view of recent changes in COVID-19 trends and other economic indicators, the Chinese government withdrew significant provisions of the zero-COVID policy in China. The present study investigates the sectoral performance of the Chinese stock market after the withdrawal of the zero-COVID policy. The study considers eighteen sectoral indices of the Shenzhen Stock Exchange of China as a sample and applies the event study methodology to study the impact of the policy withdrawal on the stock prices performance. The results of the study indicate that sectors such as hotel, consumer staples, the financial sector, real estate, media, and culture have reported significant positive movement after the withdrawal of the zero-COVID policy, while other sectors such as consumer discretionary, energy, healthcare, information technology, manufacturing, mining, technology, telecom, transportation, utilities, wholesale, and retail have shown insignificant reactions. These results also indicate that when the COVID-19 outbreak happened in China, different sectors of the economy reacted negatively except the retail and wholesale sectors, while with the withdrawal of the zero-COVID policy by the Chinese government, the reaction of investors is optimistic as different sectors are reporting either positive reactions in the stock price movement or no reaction.

Publisher

LLC CPC Business Perspectives

Subject

Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics,Finance

Cited by 3 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Dynamics of Spillover among Sectors of Indian Stock Market before and during Covid-19;MUDRA: Journal of Finance and Accounting;2023-12-10

2. Impact of COVID-19 on the Efficiency of Indian IT Companies;Vision: The Journal of Business Perspective;2023-10-19

3. Soft budget constraints in Polish public healthcare entities;Public and Municipal Finance;2023-06-22

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