| Public health events refer to sudden occurrence of major infectious disease epidemics,group diseases of unknown origin,major food and occupational poisoning,and other events that seriously affect public health,causing or potentially causing serious harm to social and public health.Its suddenness and severity have a significant impact on the economy.In 2003,SARS had a small impact due to its small number of cases and controllable range,while in 2019,the COVID-19 epidemic had a large number of cases and a wide range,leading to a huge impact.The first case of novel coronavirus infection was confirmed in China on December 8,2019,and then novel coronavirus spread rapidly in Wuhan,China,and confirmed cases were also reported globally.At the initial stage,China adopted strict restrictions on personnel mobility,suspension of work and other epidemic prevention measures,which caused greater pressure on economic development.In the capital market,corporate profit expectations were frustrated,and investor panic spread,triggering turmoil in the capital market.On the first trading day after Wuhan’s "closure",the Shanghai Composite Index fell 7.72%.After securing the defense of Hubei Province,China entered the normalization stage of epidemic prevention on April 29,2020.On the one hand,investor confidence in the capital market was restored,and on the other hand,the release of water from the Federal Reserve pushed up the global stock market index,and the global financial market seemed to be out of the haze.However,the impact of the novel coronavirus still exists.The constant variation of the novel coronavirus has greatly enhanced its communication ability.The real economy continues to be under pressure,and investor sentiment has been affected.The Shanghai Stock Exchange Index once fell to 2863.65,a cumulative decline of 20.11% from the peak.On January8,2023,under the comprehensive consideration of the central government of China,novel coronavirus pneumonia was changed to novel coronavirus infection,referred to as COVID-19 infection,and was no longer included in the quarantine infectious disease management.Since then,China has entered the era of coexistence with novel coronavirus.The research topic of this article is the impact of public health emergencies on China’s stock returns.This article first reviews the literature on investor sentiment and the impact of public health emergencies on financial markets at home and abroad.Existing literature indicates that investor sentiment and health emergencies can have an impact on financial markets.Secondly,this paper divides the development of COVID-19 epidemic in China into six stages,analyzes the path of COVID-19 epidemic affecting China’s stock returns,and puts forward relevant assumptions.Then this paper constructs the proxy indicators of the development of the COVID-19 at home and abroad,the epidemic spread index at home and abroad,and the proxy indicator of investor sentiment,the COVID-19 epidemic event attention,uses the fixed effect model for empirical analysis,and conducts a heterogeneity analysis for the Shanghai Stock Market and Shenzhen Stock Market.Finally,relevant suggestions are proposed based on the conclusions of this article.The empirical analysis results of this paper show that: First,the development of COVID-19 epidemic at home and abroad will have a negative impact on China’s stock returns,and the negative impact of the development of COVID-19 epidemic abroad on China’s stock returns is less than the development of COVID-19 epidemic in China.The development of the COVID-19 at home and abroad has a greater negative impact on the return rate of listed stocks in Shanghai Stock Exchange than that in Shenzhen Stock Exchange.Investor sentiment can significantly and negatively affect China’s stock returns.Finally,based on the research results,this article proposes the following recommendations: Individual investors should be rational and objective,improve professional ability,and avoid herd effect.The government should have emergency plans,reserve materials in advance,encourage enterprises to quickly resume production,promote household consumption through multiple channels,and introduce effective economic policies.Financial institutions have implemented financial policies in place,provided financial support to enterprises through multiple channels,and strengthened education for investors to alert them to potential risks. |
