Did COVID-19 Pandemic Affect the Sentiments expressed in the Financial Statements? - A study of New Age Technology and Nifty IT Firms

This paper investigates the change in the sentiments expressed in the annual reports/10-K filings of the firms in the New Age Technology Sectoral Indices and Nifty IT Index during COVID -19 Pandemic. We use tf.idf Weighted and simple proportion methodologies, and eight word lists from Loughran and McDonald 2020 dictionary – negative, positive, uncertainty, litigious, strong modal, weak modal, constraining and complexity; and negative and positive word lists from General Inquirer (Psychological Harvard IV), Henry 2008 and QDAP dictionaries to measure the change in the sentiments expressed in the annual reports.Friedman and post-hoc Nemenyi multiple comparison tests found significant difference in the FY 20-21 Net Sentiment distributions of Robotics, Cybersecurity, Drones and Space indices. Qualitative analysis indicated that FY 20-21 Net Sentiment scores of Virtual Reality and Nifty IT indices were least affected in FY 20-21