Do cryptocurrency and commodities markets affect stock market performance in South Asia An empirical investigation during the COVID-19 pandemic

Abstract

The emergence of cryptocurrencies, as well as global commodity price volatility, have affected the global stock market performance. The recent pandemic outbreak has exacerbated the situation. Against this backdrop, we sought to explore the relationship between cryptocurrencies, commodity, and stock market performances in South Asia, by segregating the data into two timelines. The results of GMM and fixed effects models reveal that cryptocurrencies and gold prices have a significant and negative impact on stock market performance. In addition, empirical findings also highlight that during COVID-19, the influence of cryptocurrencies and gold prices on the stock market was much greater (1.5% cryptocurrencies and 1.7% gold prices) compared to the pre-COVID-19 timeline (1.3% cryptocurrencies and 1.1% gold prices). The study also concludes that only Bitcoin and Ethereum have a significant impact on the stock market performance of South Asia. The findings offer several policy implications.