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

Abstract

This study explores whether investor sentiment, driven by Coronavirus-related news (CRNs) and economic-related announcements (ERAs) associated with the Coronavirus outbreak, is priced in medical stock portfolios in China, Hongkong, Korea, Japan, and U.S. We find that the CNRs and ERAs do not trigger irrational investment behaviours towards medical stocks. CRNs exert significant and positive effects on the five markets' medical portfolios. ERAs also pose positive and significant effects on five markets' medical portfolios. Furthermore, ERAs have stronger effects on the institutional investor sentiment than the individual investor sentiment. Total effects of CRNs and ERAs on five markets' medical stock portfolios are positive and significant, meaning the optimistic investor sentiment on the medical industry, which plays the critical role in preventing this unprecedented infectious disease.