AUTHOR=Sun Yunpeng , Li Haoning , Cao Yuning TITLE=Effects of COVID-Induced Public Anxiety on European Stock Markets: Evidence From a Fear-Based Algorithmic Trading System JOURNAL=Frontiers in Psychology VOLUME=12 YEAR=2022 URL=https://www.frontiersin.org/journals/psychology/articles/10.3389/fpsyg.2021.780992 DOI=10.3389/fpsyg.2021.780992 ISSN=1664-1078 ABSTRACT=

The effect of COVID-induced public anxiety on stock markets, particularly in European stock market returns, is examined in this research. The search volumes for the notion of COVID-19 gathered by Google Trends and Wikipedia were used as proxies for COVID-induced public anxiety. COVID-induced public anxiety was shown to be linked with negative returns in European stock markets when a panel data method was used to a sample of data from 14 European stock markets from January 2, 2020 to September 17, 2020. Using an automated trading system, we used this finding to suggest investment methods based on COVID-induced anxiety. The findings of back-testing indicate that these techniques have the potential to generate exceptional profits. These results have significant consequences for government officials, the media, and investors.