The Reaction of the Malaysian Stock Market to the COVID-19 Pandemic

  • Mehmood, Waqas (School of Economics, Finance and Banking, Universiti Utara Malaysia) ;
  • Mohd-Rashid, Rasidah (School of Economics, Finance and Banking, Universiti Utara Malaysia) ;
  • Aman-Ullah, Attia (School of Business Management, Universiti Utara Malaysia) ;
  • Shafique, Owais (Department of Islamic and Conventional Banking, Institute of Business, Management and Administrative Sciences, The Islamia University of Bahawalpur) ;
  • Tajuddin, Ahmad Hakimi (School of Accounting & Finance, Taylor, University)
  • Published : 2021.12.31


The present study was conducted to understand the turmoil effects of COVID-19 pandemic on the Malaysian stock market during the different periods of the Movement Control Order (MCO). The present study was based on the secondary data extracted from the DataStream and Bloomberg from 2nd January 2020 to 29th May 2020 to evaluate the effects of COVID-19 pandemic on the Malaysian stock market. The findings suggested that during the different periods of the Movement Control Order (MCO) from the 1st January to 29th May 2020, the COVID-19 pandemic adversely affected the performance of KLCI index and all sectoral indices. The weakest performance indices were energy, property, and finance while the least affected indices were healthcare, technology, telecommunications, and media. This paper provides a review of the impacts of COVID-19 pandemic on the Malaysian stock market throughout the different periods of MCO.



The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the paper. The authors also would like to acknowledge their gratitude for funding from the Fundamental Research Grant Scheme FRGS/1/2018/SS01/UUM/02/7) (S/O Code: 14203) provided by the Ministry of Higher Education, Malaysia.


  1. Abukhalifeh, A. N., Chandran, K., & Faller, E. M. (2020). Understanding the Dichotomy of COVID-19 and Its Economic Impact on the Tourism Industry in South Korea. Review of Integrative Business and Economics Research, 9(4), 25-35.
  2. Akira Toda, A. (2020). Susceptible-Infected-Recovered (SIR) Dynamics of COVID-19 and Economic Impact. arXiv e-prints, arXiv: 2003.11221.
  3. Al-Awadhi, A. M., Alsaifi, K., Al-Awadhi, A., & Alhammadi, S. (2020). Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns. Journal of Behavioral and Experimental finance, 27, 1-5.
  4. Albulescu, C. (2020). Coronavirus and financial volatility: 40 days of fasting and fear. arXiv preprint arXiv:2003.04005.
  5. Aravind, M., & Manojkrishnan, C. (2020). COVID 19: Effect on leading pharmaceutical stocks listed with NSE. International Journal of Research in Pharmaceutical Sciences,1(11), 31-36.
  6. Baldwin, R., & Di Mauro, B. W. (2020). Economics in the time of COVID-19: A new eBook. VOX CEPR Policy Portal.
  7. Beutels, P., Jia, N., Zhou, Q. Y., Smith, R., Cao, W. C., & De Vlas, S. J. (2009). The economic impact of SARS in Beijing, China. Tropical Medicine & International Health, 14(1), 85-91.
  8. Fernandes, N. (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy. IESE Business School Working Paper No. WP-1240-E. Available at SSRN 3557504.
  9. Hadi, A. G., Kadhom, M., Hairunisa, N., Yousif, E., & Mohammed, S. A. (2020). A Review on COVID-19: Origin, Spread, Symptoms, Treatment, and Prevention. Biointerface Research in Applied Chemistry, 10(6), 7234-7242.
  10. Khetrapal, S., & Bhatia, R. (2020). Impact of COVID-19 pandemic on health system & sustainable development goal 3. Indian Journal of Medical Research, 151(5), 395-399.
  11. Lee, K. Y.-M., Jais, M., & Chan, C.-W. (2020). Impact of Covid-19: Evidence from Malaysian Stock Market. International Journal of Business and Society, 21(2), 607.
  12. Li, R., Zhang, R., Zhang, M., & Zhang, T. (2020). Investment analysis and strategy for COVID19., Available at SSRN 3563300.
  13. Liu, W., and Z, Cai. 2003. The analysis and prospect of China's macroeconomic situation after SARS. Red Flag Manuscript 17, 18-22.
  14. Liu, H., Manzoor, A., Wang, C., Zhang, L., & Manzoor, Z. (2020). The COVID-19 outbreak and affected countries stock markets response. International Journal of Environmental Research and Public Health, 17(8), 2800.
  15. Marahatta, S. B., Paudel, S., & Aryal, N. (2020). COVID-19 Pandemic: What can Nepal do to Curb the Potential Public Health Disaster? Journal of Karnali Academy of Health Sciences, 3(1), 1-13.
  16. Majid M. Covid-19: panic and the Malaysian economy. New Straits Times; 2020 Retrieved from [Accessed 31 March 2020].
  17. Mohammad Waliul Hasanat, A. H., Farzana Afrin Shikha, Mashrekha Anwar. (2020). The Impact of Coronavirus (Covid-19) on E-Business in Malaysia. Asian Journal of Multidisciplinary Studies, 3(1), 1-6.
  18. Murugiah S. Covid-19 to place Malaysian economy into technical recession, says AmBank. The Edge Markets; 2020 Retrieved from [Accessed 1 April 2020].
  19. Nashirah Abu Bakar, S. R. (4 April 2020). Effect of Coronavirus disease (COVID-19) to Tourism Industry. International Journal of Advanced Engineering Research and Science, 7(4), 1-5.
  20. Nia, V. M. (2020). The effect of corona outbreak on the Indonesian stock market. American Journal of Humanities and Social Sciences Research, 4(3), 358-370.
  21. Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. International Journal of Surgery, 78(1), 185-193.
  22. Njindan Iyke, B. (2020). The disease outbreak channel of exchange rate return predictability: Evidence from COVID-19. Emerging Markets Finance and Trade, 56(10), 2277-2297.
  23. OECD (2020). Coronavirus: The world economy as risk. Retrieved from
  24. Ramelli, S., & Wagner, A. F. (2020). Feverish stock price reactions to COVID-19. The Review of Corporate Finance Studies, 9(3), 622-655.
  25. Ruiz Estrada, M. A., Park, D., & Lee, M. (2020). The evaluation of the final impact of Wuhan COVID-19 on trade, tourism, transport, and electricity consumption of China. Tourism, Transport, and Electricity Consumption of China.
  26. Saini, R. (2020). Impact of Corona Virus on Indian Economy. Available at SSRN 3595300.
  27. Sansa, N. A. (2020). The Impact of the COVID-19 on the Financial Markets: Evidence from China and USA. Electronic Research Journal of Social Sciences and Humanities, 2(2), 1-10.
  28. Sharma, S., & Bhatta, J. (2020). Public health challenges during the COVID-19 outbreak in Nepal: a commentary. Journal of Health Research, 34(4), 373-376.
  29. Star Media (2020). Short position: clueless on MCO impact. Retrieved from
  30. Tashanova, D., Sekerbay, A., Chen, D., Luo, Y., Zhao, S., & Zhang, T. (2020). Investment opportunities and strategies in an era of Coronavirus pandemic.
  31. Watanabe, T. (2020). The responses of consumption and prices in Japan to the COVID-19 crisis and the Tohoku Earthquake, Center on Japanese Economy and Business, Working paper series, No. 373.
  32. Weersink, A., von Massow, M., & McDougall, B. (2020). Economic thoughts on the potential implications of COVID?19 on the Canadian dairy and poultry sectors. Canadian Journal of Agricultural Economics, 68(1), 1-6.
  33. WHO. (2020). WHO Coronavirus Disease (COVID-19) Dashboard. Retrieved from
  34. WHO Europe. (2020). Coronavirus disease (COVID-19) pandemic. Retrieved from
  35. Yan, B., Stuart, L., Tu, A., & Zhang, T. (2020). Analysis of the Effect of COVID-19 on the stock market and investing strategies.
  36. Yilmazkuday, H. (2020). COVID-19 Effects on the S&P 500 index.
  37. Zeren, F., & Hizarci, A. (2020). The impact of COVID-19 coronavirus on stock markets: evidence from selected countries. Muhasebe ve Finans Incelemeleri Dergisi, 3(1), 78-84.
  38. Zhou, L., Wu, K., Liu, H., Gao, Y., & Gao, X. (2020). CIRD-F: Spread and Influence of COVID-19 in China. Journal of Shanghai Jiaotong University (Science), 25(2), 147-156.