Role of investor sentiment in financial markets: an explanation by behavioural finance approach

Coronavirus (Covid-19) outbreak, investor sentiment, and medical portfolio: Evidence from China, Hong Kong, Korea, Japan, and U.S

“…Instead, such sentiment is largely determined by the investors' own perceptions of news released and/or events occurred. Investors may be over or under confident when receiving a news published and/or witnessing an event regarding the behavioral finance theory ( Raissi and Missaoui, 2015 ). Thus, their sentiment varies, leading to their either rational or irrational behaviours ( Hudson et al, 2020 ).…”

Covid-19 Vaccine: Global Stock Market “Game Changer”

“…This raises concerns and results in growing economic uncertainty (Baker, et al, 2020). The spillover effect has a significant negative impact on the global economy (Sun, et al, 2021), including investor confidence in the stock market (Raissi and Missaoui, 2015;Bajo and Raimondo, 2017). The waning investor confidence causes uncertainty about the growth opportunities of listed companies on the stock exchange for the future -this then increases the risk of stock prices falling (Hong and Stein, 2003).…”

Using TGARCH-M to Model the Impact of Good News and Bad News on Covid-19 Related Stocks’ Volatilities

“…Brown and Cliff (2005) used investor sentiment and long-term asset valuations and returns constructed using fund discounts to conclude that large market capitalisation and low book value portfolios can cause investors to push prices above their intrinsic value when they are overly optimistic, and that sentiment and valuation errors are positively correlated and past returns are predictive of future returns. Raissi and Missaoui (2015) use principal component analysis, a measure of investor sentiment, to investigate the correlation between investor sentiment and stock market liquidity and returns, respectively, in their study of stock markets. Stambaugh et al (2012) obtained good results by examining the excess returns, high and low book-to-market P/E ratios, and small and large company earnings differentials on returns for investor sentiment construction in the stock market.…”