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VOL. 7, ISSUE 4 (2025)
Assessing the impact of geopolitical risk on stock returns in the steel industry
Authors
C R Pavan Kumar, Dr. Dinesh K, Dr. Janet Jyothi Dsouza
Abstract
This study examines the impact of geopolitical risk, with a particular
focus on the COVID-19 pandemic, on stock returns and volatility within the
Indian steel industry, specifically Mukund Steel Ltd., over a four-year period
divided into two years before and two years after key geopolitical events.
Using a non-random, judgmental sampling method, secondary data were collected
from BSE and NSE websites, supplemented by academic literature from databases
such as Google Scholar and Emerald Insight. Statistical analysis reveals a
significant increase in market volatility post-COVID across the SENSEX, MUKUND,
and METAL indices, as indicated by higher standard deviations, more extreme
negative returns, increased kurtosis, and shifts toward negative skewness. GARCH
(1,1) modeling shows a slight strengthening of return autocorrelations for
SENSEX and METAL after COVID, though these relationships remain marginally
insignificant, while MUKUND exhibits weak and statistically insignificant
return dynamics throughout. The findings highlight heightened market
instability and irregular fluctuations during the COVID-19 period, underscoring
the pandemic’s role in amplifying financial market volatility. The study
suggests that investors and portfolio managers should adopt robust risk
management strategies during periods of increased uncertainty and calls for
further research incorporating sector-specific factors and macroeconomic
variables to better understand volatility drivers in stressed markets.
Continuous monitoring using models like GARCH is recommended to enable timely
adaptation of investment strategies in crisis contexts.
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Pages:67-71
How to cite this article:
C R Pavan Kumar, Dr. Dinesh K, Dr. Janet Jyothi Dsouza "Assessing the impact of geopolitical risk on stock returns in the steel industry". International Journal of Finance and Commerce, Vol 7, Issue 4, 2025, Pages 67-71
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