Exchange rate, stock price and trade volume in US-China trade war during COVID-19: An empirical study

Abstract

This article aims to examine the influence of international trade wars on the majority of stock market operations, both directly and indirectly affected. The impact of the trade war on the exchange rates of the participating countries was similarly negative. This article seeks to trace the conversion standards' footprints in the United States, China, and India using several indexes such as the Shanghai Composite Index, Dow Jones index, and Nifty 50. The cost of closing down various indices on a daily basis, as well as the conversion standard upsides of the participating currencies, are all examined in this study. Furthermore, utilizing the OLS and GARCH models, this work provides insights into measuring the uncertainties about the impact of exchanging scale on financial exchange. According to the findings of OLS, changes in the swapping scale have had a minor impact on the daily closing costs of stock records in the individual countries. The conversion standard, on the other hand, has a major impact on trade volumes in all three stock markets. When compared to the SSE and DJI equities, the GARCH model predicts that the contingent shift will be less shocking, resulting in a smaller impact on Nifty trade volume. To replicate the impact of trade wars during the Covid-19 crisis, the final results imply that data from domestic and international financial transactions must include securities market transactions.