The Impact of COVID-19 Related News on the GCC Countries’ Stock Market Prices

The news media has a powerful influence on public opinion, government decisions, and financial markets. News stories can make investors uncertain or optimistic, impacting financial market predictions (Franzoni, 2006). According to Franzoni (2006), any major global event can cause significant disruption in the stock markets of the GCC countries, which many investors reacted to immediately, shaping their sentiment and affecting their trading decisions. News of lockdowns and new variants caused volatility, reflecting investor worries (IMF, 2021). Therefore, this paper investigates the impact of COVID-19-related news and other relevant indicators on stock prices during and after COVID-19. In particular, the impact of the panic index, fake news index, sentiment index, and infodemic index on each GCC country's stock market prices from 1 February 2020 till 31 January 2024. The data used in this study have been collected from Bloomberg and RavenPack Coronavirus Media Monitor following a quantitative analysis. Using the Ordinary Least Squares Regression Model (OLS), Fixed and Random Effect Tests, and the FGLS Model, the results show a positive and significant impact between the stock market and the independent variables at 99% and 95% during and post the COVID-19 pandemic. Focusing on the FGLS model, the results show a significance of 99% for all variables during and post-COVID-19 periods studied. This indicates that during the period studied, stock market prices were highly volatile and greatly affected by COVID-19-related news. Thus, this research is significant as it clearly explains how news related to the pandemic affected the movement of stock market prices in the GCC countries.