ABSTRACT
In order to reveal the macroeconomic effects of the Covid-19 pandemic, financial markets should also be handled in addition to the real sector. Investigating the changes in the stock market may give clues to analyze the effects of the pandemic on financial markets. The researches in question can be carried out for a country group or a single country. Studies that are conducted for a single country allow researchers to analyze problems more precisely and put forward more specific and convenient policy suggestions. Furthermore, while investigating the effect of the pandemic on stock markets, handling conventional and Islamic stock markets together can provide more comparative and realistic data in determining the policies regarding financial markets. The aim of the study is to examine the reaction of conventional and Islamic stock markets to the Covid-19 outbreak in Turkey. In the study, the DCC-GARCH method was applied by using the daily data from Feb 10, 2011 to Sep 02, 2020. The empirical results indicated that Islamic stock markets are more stable to the global Covid-19 outbreak shock than the conventional stock market in Turkey. Based on these findings it can be suggested that Turkey should take steps to support the development of the Islamic financial system to have a sounder financial system.