HOW ECONOMIC SHOCKS AND HUMAN BEHAVIOR DROVE STOCK MARKET VOLATILITY DURING COVID-19

The continuing COVID-19 outbreak has led to several consequences concerning the health of the public as well as economic and financial market repercussions throughout the world. Stock markets experienced huge falls due to lockdown, closure and increased uncertainty amongst the investors in early 2020. The current study attempts to understand the impacts of the current COVID-19 outbreak on the volatility in the Indian and US stock markets through the performance of the BSE Sensex and S&P 500 indices. Moreover, the influence of the behavior of investors, fear, and government policy on stock market dynamics would also be analyzed in the present study. The secondary data has been utilized for this research which has been taken from authentic sources such as BSE, S&P, RBI, WHO, and journal articles. It is found from the findings that even though the economic shock was responsible for the fall in the stock market, the investor sentiment and government policies played a key role in stabilizing the market.