Investor Sentiment

Investor sentiment is one of the non-fundamental factors that affect the financial markets, which itself is influenced by various factors, including oil price changes. This study aims to investigate the impact of oil price on investor sentiment in stock market industries in the Tehran Stock Exchange (TSE) using monthly data from April 2010 to June 2020. To investigate this issue, stock exchange industries were grouped into three categories: total industries, oil-related industries, and non-oil industries, and the effect of oil prices on investor sentiments in these three groups was examined using the pooled mean group (PMG) technique. The PMG approach considers both the short- and long-run relation between series and provides reliable results in the context of dynamic heterogeneous panel models. The implementation of PMG in all three models shows the impact of oil prices on investor sentiment over both the short and long run. Findings suggest also that oil price has positive and significant in all three models in the long run and the oil price coefficient is higher in oil-related industries than non-oil-related industries. These results are the opposite of the results obtained by similar studies, which can be due to the special features of countries, e.g. being oil exporters or oil importers

Investor expectations future economic processes are among the crucial factors affecting their decisions. The expectations seem to play a specific role since they are unsupervised variables capable of forming observable economic phenomena. Psychological factors influence investor expectations and corporate market value. Investor sentiments was modelled with an emphasis on psychological factors based on the Grounded Theory (GT). This applied and mixed-methods at its first and second stages. The statistical population comprised 13 experts, senior managers of investment companies, and university professors. The participants were selected through purposive and snowball sampling and the process was continued until theoretical saturation. The data were collected via semi-structured interviews coded via Atlas.ta.8 software. The research data were analysed using an open coding method. The results of the research were presented in 46 categories and 6 key dimensions.

In the behavioral finance paradigm, investor sentiment can affect managers' behavior in financial reporting. Therefore, this study examines the relationship between investor sentiment and the likelihood of fraudulent financial reporting. Additionally, as risk disclosure may influence the relationship between investor sentiment and the likelihood of fraud, this paper investigates its moderating role. For this purpose, the data of 41 companies operating in the petroleum and petrochemical industries in Tehran Stock Exchange during the years 2013 to 2021 were used. The research models have been examined by logistic regression method. The results show that the likelihood of fraud is lower when investor sentiment is high. Furthermore, the study of the market's reaction to fraud shows that the market reaction to fraud announcements is less negative during high investor sentiment periods. In addition, the results demonstrated that risk disclosure moderates the relationship between investor sentiment and the likelihood of fraudulent financial reporting. It may be because, risk disclosure reduces the impact of investor sentiment on auditors' optimism by reducing information asymmetry between managers and investors. This leads to an increase in audit report clauses that confirm likelihood of fraudulent financial reporting.