Margarida Bagão – Escola Superior de Ciências Empreasarias, Instituto Politécnico de Setubal, Portugal
Rui Dias – Escola Superior de Ciências Empreasarias, Instituto Politécnico de Setubal & CEFAGE, Universidade de Évora, Portugal
Paula Heliodoro – Escola Superior de Ciências Empreasarias, Instituto Politécnico de Setubal, Portugal
Paulo Alexandre – Escola Superior de Ciências Empreasarias, Instituto Politécnico de Setubal, Portugal




6th International Scientific-Business Conference – LIMEN 2020 – Leadership, Innovation, Management and Economics: Integrated Politics of Research – CONFERENCE PROCEEDINGS, Online/virtual, November 26, 2020, published by the Association of Economists and Managers of the Balkans, Belgrade; Printed by: SKRIPTA International, Belgrade, ISBN 978-86-80194-39-4, ISSN 2683-6149, DOI:



The fast spread of coronavirus (COVID-19) had negative impacts on financial markets worldwide. It created uncertainty and a lack of confidence, causing unprecedented levels of risk, causing sharp losses to investors in a very short period. In view of these events, this essay aims to investigate the relationship between Covid-19 (confirmed cases and deaths), and the stock market indexes of Greece (ATG), France (CAC40), Germany (DAX 30), United Kingdom (FTSE 100), Italy (FTSE MID), Spain (IBEX 35), Ireland (ISEQ), and Portugal (PSI 20), from December 31st, 2019 to July 23rd, 2020. In order to achieve such an analysis, we want to validate if: the increase in cases and deaths resulting from Covid-19 have any connection with the financial markets under analysis? If so, do these connections cause shocks in European financial markets? The results suggest structure breaks, mostly, in March 2020. Covid-19 data (confirmed cases) integrate with the Covid-19 data series (deaths), with the Spanish market (IBEX 35), Greece (ATG), and Italy (FTSE MID). However, the Covid-19 data series (deaths), is synchronized with the Covid-19 data (confirmed cases), with the markets of Germany (DAX 30), France (CAC 40), Ireland (ISEQ), Italy ( FTSE MID), United Kingdom (FTSE 100) and Portugal (PSI 20), just does not synchronize with the Greek market (ATG). We can easily see that the Covid-19 data series (deaths) has a major impact on Europe’s financial markets. The results of the VAR Granger Causality / Block Exogeneity Wald Tests model suggest 2 bidirectional causal relationships between confirmed cases and deaths from the Covid-19 virus. However, there were no shocks between Covid-19 data (confirmed cases and deaths) and the financial markets under analysis. As a final discussion, we consider that investors should avoid investments in the stock exchange, at least while this pandemic lasts, and rebalance their portfolios in hedging and/or sovereign debt assets, to mitigate risk and improve the efficiency of their portfolios.



Covid-19 Coronavirus, Stock markets, Epidemic.



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