THE EFFECT OF FINANCIAL STRESS ON STOCK MARKETS: AN EXAMPLE OF MINT ECONOMIES

Increasing uncertainties due to developments in financial markets lead to uncontrollable financial behaviors. Financial stress indices are created by taking into account many different financial indicators directly related to the financial system. So, it is important to examine the impact of financial stress indices on stock markets, which have an important share in financial markets. The paper aims to investigate the short and long-term effects of emerging markets' financial stress index (EFSI) and global financial stress indices (GFSI) on the stock markets of MINT (Mexico, Indonesia, Nigeria, and Turkey) economies. For this purpose, analyses were made using the ARDL (Autoregressive Distributed Lag) Bounds Test method using weekly data for the period 10/01/2014-26/04/2024. It has been determined that EFSI and GFSI negatively affected the benchmark stock market indices of all MINT economies in the short term and that the negative effect continued in the long term but it has been significant for only EFSI in all MINT economies, as important results of the analysis. It has been determined that following financial stress indices can be a leading indicator for stock market investors. It is hoped that the results of the paper may be useful for financial market actors who are considering investing in these markets.