Oil and stock markets volatility during pandemic times: a review of G7 countries

Tahir Mumtaz Awan; Muhammad Shoaib Khan; Inzamam Ul Haq; Sarwat Kazmi; Tahir Mumtaz Awan; Muhammad Shoaib Khan; Inzamam Ul Haq; Sarwat Kazmi

doi:10.3934/GF.2021002

Green Finance

2021, Volume 3, Issue 1: 15-27. doi: 10.3934/GF.2021002

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Research article

Oil and stock markets volatility during pandemic times: a review of G7 countries

Department of Management Sciences, COMSATS University Islamabad, Park Road, Tarlai Kalan, Islamabad, Pakistan

Received: 08 January 2021 Accepted: 01 February 2021 Published: 03 February 2021
JEL Codes: I1, G01, G120, H12, P51

This review aims to produce insight into the volatilities trio (COVID-19 crisis, stock markets, and crude oil volatility). The understanding of risk trends in stock markets of G7 economies and crude oil as a hedge are two vital concerns for investors, researchers, and portfolio managers around the globe. During the pandemic times, globally among others oil and stock markets are severely getting affected. Considering the main purpose and role of G7 countries to resolve global issues focusing on economic concerns, this review is planned. The published work in journals of repute was selected on the term mechanism (COVID-19 and stock markets or COVID-19 and oil prices) was conducted which resulted in 29 articles in total. It was found in the resulting articles that there exists plunged volatility in stock markets and crude oil due to COVID-19. Crude oil has mixed results as a hedge due to price fluctuation. It was found that prices of crude oil declined due to lockdowns which consequently decreased the demand, however, still demand caused lower oil price. Likewise, the COVID-19 triggered to increase in the volatility of all G7 stock markets. This review is the first of its kind combining theoretical information about the impact of COVID-19 on crude oil and stock markets around G7 countries. Moreover, current research opens potential avenues for future research and this review can be helpful for similar efforts at a later stage.
- COVID-19,
- stock market volatility,
- crude oil volatility,
- G7 countries
Citation: Tahir Mumtaz Awan, Muhammad Shoaib Khan, Inzamam Ul Haq, Sarwat Kazmi. Oil and stock markets volatility during pandemic times: a review of G7 countries[J]. Green Finance, 2021, 3(1): 15-27. doi: 10.3934/GF.2021002

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Abstract

This review aims to produce insight into the volatilities trio (COVID-19 crisis, stock markets, and crude oil volatility). The understanding of risk trends in stock markets of G7 economies and crude oil as a hedge are two vital concerns for investors, researchers, and portfolio managers around the globe. During the pandemic times, globally among others oil and stock markets are severely getting affected. Considering the main purpose and role of G7 countries to resolve global issues focusing on economic concerns, this review is planned. The published work in journals of repute was selected on the term mechanism (COVID-19 and stock markets or COVID-19 and oil prices) was conducted which resulted in 29 articles in total. It was found in the resulting articles that there exists plunged volatility in stock markets and crude oil due to COVID-19. Crude oil has mixed results as a hedge due to price fluctuation. It was found that prices of crude oil declined due to lockdowns which consequently decreased the demand, however, still demand caused lower oil price. Likewise, the COVID-19 triggered to increase in the volatility of all G7 stock markets. This review is the first of its kind combining theoretical information about the impact of COVID-19 on crude oil and stock markets around G7 countries. Moreover, current research opens potential avenues for future research and this review can be helpful for similar efforts at a later stage.

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