The Mechanism of Analyzing Investors? Sentiments and Accounting Information on Stock Market Prices

In this research, we tried to study the main objective of the research, the mechanism of analysis of investors' sentiments and accounting information on stock market prices, through the effect of investors’ sentiments on expected earnings growth rate and hierarchical regression method. To measure the investor sentiment index, we used a composite index consist of five microeconomic, and two macroeconomic measures to reduce macroeconomic effects. To achieve this goal, the data of 560 companies during the financial periods from 2009 to 2016 is used. The results of this study showed that there is a positive and significant relationship between investors' sentiments and expected earnings growth. The results also showed that the sentimental behavior of investors reduces the impact of accounting information on stock pricing. In addition, the results of further analysis also showed that interaction effects of investors' sentiments and accounting information have a positive and significant relationship with stock price.