Investigating the Impact of COVID-19 Pandemic First and Second Wave on the Indian Stock and Commodity Market: An ARDL Analysis of Gold, Oil and Stock Market Price

COVID-19 and its consequential impact on the economic fundamentals is a highly discussed topic among the researchers. However, there is a literature void in context to the Indian commodity and financial market. To bridge this gap current study tries to investigate the influence of COVID-19 on the Indian commodity and financial market by taking the data of the National stock exchange of India representing financial markets, and the gold prices & oil prices representing commodity markets. The data is segregated into three-time lines i.e. whole period (1st April 2020 to 10th April 2021), first wave (6th June-30th September 2020), and second-wave (2nd February-10th April 2021) and to investigate the above relationship Autoregressive Distribution Lag (ARDL) approach is employed. The findings suggest that during the whole period of study and first wave, coronavirus spread has a significant negative influence on the oil prices and the stock market. However, the impact is significant and positive for gold prices. The Wald test also confirms a long-run cointegration among the variables in both the period of study. In context to the second wave, the study contradicts the above findings and concludes that during the second wave, the spread of COVID cases has a positive impact on oil prices and stock markets whereas a negative impact on the gold prices.The findings highlight the issue of uncertainty of pandemic, symmetry, demand theory and also highlight the inverse relationship of gold and equity instruments, which will help in making suitable policy-oriented decisions.