The Russia-Ukraine War’s Impact on Stock Markets in Asia-Pacific, the United States, and Europe

Abstract

We examine how the outbreak of the Russia-Ukraine war affected specific stock indices in the Asia-Pacific region, the United States, and Europe. Using event study methodology, we find that the event day’s abnormal returns indicate that the war’s outbreak had a significantly negative impact on most indices. For example, countries like Australia, Germany, Pakistan, India, Singapore, Vietnam, Mongolia, Malaysia, Bangladesh, and the Philippines show significantly negative returns the day after the war’s outbreak. All indices continue to have significantly negative returns in the rest of the post-event window, except Australia, Bangladesh, India, and the Philippines. Our analysis enables us to identify which countries in the Asia Pacific region along with selected markets from the Europe region, the counties directly bordering Ukraine were most vulnerable to war news and when the immediate consequences of the war were better than expected, confirming these cross-sectional implications.