Abstract:

The world is undergoing one of the biggest economic crises since the 1929 Great Depression with the coronavirus pandemic. The emergence of the COVID pandemic, before the effects of the 2008 global economic crisis have not evaded, triggered the dynamics of the economic crisis again. The European Union (EU) economy is also deeply affected by the crisis. This paper explores the relationship between the number of coronavirus disease 2019 (COVID-19) cases and Europe's most important stock market indices by using time series analysis. While performing the analysis, three different models were created. In this context, the number of cases of COVID-19 has been used as independent variables, while DAX Index, CAC 40 Index, and Euronext 100 Index have been tested as dependent variables, respectively. The analysis results prove that there is a long-run cointegration relationship between variables. We also found that the Error Correction Model results are statistically significant. Consequently, the results of the estimator determine that the COVID-19 negatively affected the European stock markets.

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