During the period of COVID-19, very little information was published to investors. Investors' decisions, therefore, were based not only on declared information but also on sentiment. The present study investigates the extent to which these two factors influence the stock market prices. The study adds to the literature related to the debate between traditional finance and behavioral finance in terms of studying whether the stock market is only driven by information or is also affected by sentiment. Results reveals that investor sentiment has a great effect on the stock market in both developed and developing countries. The study also proves that the stock markets in both developed and developing countries are affected not only by information but also by certain behavioral and cognitive biases. This result adds to literature in favor for the theory of behavioral finance.
Keywords: investor sentiment, COVID-19, stock market price, stock market efficiency, developed markets, developing markets.