The financial markets have seen dramatic movement on an unprecedented scale. The present results show that global financial market risks have increased substantially in response to the pandemic. Individual stock market reactions are clearly linked to the severity of the outbreak in each country. The great uncertainty of the pandemic and its associated economic losses has caused markets to become highly volatile and unpredictable.

Policy reactions to contain the virus and level the stock markets are needed; however, non-conventional policy interventions, such as the US’ unlimited QE, create further uncertainty and may cause long-term problems. In addition, countries are not working together to cope with these challenges, as markets in the country group studied here are responding differently to national-level policies and the general development of the pandemic.