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The influence of investor sentiment on the Chinese stock market amid COVID-19: An event study analysis

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  • Yufei Sun
  • Chen Yang

Abstract

This study investigates the influence of investor sentiment on the Chinese stock market during the COVID-19 pandemic, using an event study analysis to examine data from December 2019 to December 2022. It aims to explore how investor sentiment, driven by news, social media, and economic uncertainties, has affected stock market performance during the pandemic. Data from 2005 to 2022 have been used to analyze abnormal and cumulative returns across key pandemic-related events, such as government interventions, lockdowns, and vaccine rollouts. The results show significant fluctuations in market returns driven by changes in sentiment. Positive sentiment, linked to government stimulus measures and vaccine announcements, led to positive market reactions, while negative sentiment, stemming from pandemic uncertainty, triggered market downturns. The study contributes to understanding the role of sentiment in market volatility, particularly in an emerging market like China, during periods of crisis. Accordingly, the study suggests multiple policy implications for policy makers.

Suggested Citation

  • Yufei Sun & Chen Yang, 2025. "The influence of investor sentiment on the Chinese stock market amid COVID-19: An event study analysis," PLOS ONE, Public Library of Science, vol. 20(9), pages 1-21, September.
    • Handle: RePEc:plo:pone00:0332216
    DOI: 10.1371/journal.pone.0332216
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