Effect of Russia-Ukraine Conflict on Sectoral Indices; A Pragmatic Investigation of Indian Stock Market

International Journal of Economics and Management Studies

© 2023 by SSRG - IJEMS Journal

Volume 10 Issue 10

Year of Publication : 2023

Authors : Aaryash Bhandari, Amritkant Mishra

10.14445/23939125/IJEMS-V10I10P106

How to Cite?

Aaryash Bhandari, Amritkant Mishra, "Effect of Russia-Ukraine Conflict on Sectoral Indices; A Pragmatic Investigation of Indian Stock Market," SSRG International Journal of Economics and Management Studies, vol. 10,  no. 10, pp. 47-53, 2023. Crossref, https://doi.org/10.14445/23939125/IJEMS-V10I10P106

Abstract:

Current research aims to examine the implications of the fresh Russian invasion of Ukraine on the sectoral indices of the Indian stock exchange based on the daily data from January 1, 2021, to June 30, 2023. The result of the t-test signifies that there is no substantial impact on the sectoral indices. Alternatively, the consequence further reveals that the emergence of the Russia-Ukraine war has created some level of uncertainty among the energy, oil and gas, real estate, IT, and FMCG sectors of the Indian stock exchange, as the return volatility of these indices is significantly different during the pre-and post-conflict periods. Finally, the regression analysis results reveal that the news about the current crisis significantly negatively impacts the auto and banking indices. At the same time, other sectors seem to be unaffected. The policy implications of the present article suggest that the recent Russia-Ukraine crisis leads to uncertainty in India's energy, oil and gas, real estate, IT, and FMCG sectors; hence, investors in these sectors should be cautious while investing during such a crisis. On the other hand, investors do not need to panic due to such an event, which seriously impacts the average return of sectoral indices.

Keywords:

Sectoral indices, Russian ukraine crisis, Indian stock exchange, Volatility.

References:

[1] Shaker Ahmed, Mostafa M. Hasan, and Md. Rajib Kamal, “Russia–Ukraine Crisis: The Effects on the European Stock Market,” European Financial Management, vol. 29, no 4, pp. 1078-1118, 2022.
[CrossRef] [Google Scholar] [Publisher Link]
[2] Chinmaya Behera, “The Crude Oil Price–Stock Return Connectedness and the Impact of the Russian Ukraine war on Stock Returns in East Asian Countries,” Bulletin of Monetary Economics and Banking, vol. 26, pp. 97-110, 2023.
[CrossRef] [Google Scholar] [Publisher Link]
[3] Mohamed Beraich et al., “Volatility Spillover Effects of the US, European and Chinese Financial Markets in the Context of the Russia–Ukraine Conflict,” International Journal of Financial Studies, vol. 10, no. 4, pp. 1-18, 2022.
[CrossRef] [Google Scholar] [Publisher Link]
[4] Ahmed Bossman, and Mariya Gubareva, “Asymmetric Impacts of Geopolitical Risk on Stock Markets: A Comparative Analysis of the E7 and G7 Equities during the Russian-Ukrainian Conflict,” Heliyon, vol. 9, no.2, 2023.
[CrossRef] [Google Scholar] [Publisher Link]
[5] Sabri Boubaker et al., “Heterogeneous Impacts of Wars on Global Equity Markets: Evidence from the Invasion of Ukraine,” Finance Research Letters, vol. 48, 2022.
[CrossRef] [Google Scholar] [Publisher Link]
[6] Ammar Jreisat et al., “The Impact of Ukrainian Crisis on the Connectedness of Stock Index in Asian Economics,” Emerging Science Journal, vol. 7, no. 2, pp. 354-365, 2023.
[CrossRef] [Google Scholar] [Publisher Link]
[7] Renata Karkowska, and Szczepan Urjasz, “How Does the Russian-Ukrainian War Change Connectedness and Hedging Opportunities? Comparison between Dirty and Clean Energy Markets Versus Global Stock Indices,” Journal of International Financial Markets, Institutions and Money, vol. 85, 2023.
[CrossRef] [Google Scholar] [Publisher Link]
[8] Mishra, A. "Crude Oil, Stock Market, and Foreign Exchange Return Volatility and Spillover: a GARCH DCC analysis of Indian and Japanese Financial Market". International Journal of Business Innovation and Research (IJBIR), ISSN no 1751- 0260. Inderscience publication. Vol 10, no 03, pp- 25-46, 2019.
[Google Scholar] [Publisher Link]
[9] Mishra, A. “Foreign Exchange, Gold, and Real Estate Markets in India: An Analysis of Return Volatility and Transmission”. Indian Journal of Finance, Vol 13, no 07, pp-50-64, 2019a.
[Google Scholar] [Publisher Link]
[10] Mishra, A., Dash. A., Pandey, S., and Agarwal, A. “Dynamic spillover among the sectoral indices: Evidence from first and second waves of COVID-19”, International Journal of Financial Engineering, Vol. 10, no. 03, 2023.
[Google Scholar] [Publisher Link]
[11] Mishra, A., Mishra. A., and Dash. A. “Impact of The Russia-Ukraine Crisis on Food Inflation and Stock Markets in Asian Economies: With Reference to India, China, Japan and Thailand”, International Journal of Social Science and Economic Research, vol. 08, no 05, 2023.
[Google Scholar] [Publisher Link]
[12] Meihong Sun, Huasheng Song, and Chao Zhang, “The Effects of 2022 Russian Invasion of Ukraine on Global Stock Markets: An Event Study Approach,” SSRN, pp. 1-22, 2022.
[CrossRef] [Google Scholar] [Publisher Link]
[13] Martin Nerlinger, and Sebastian Utz, “The Impact of the Russia-Ukraine Conflict on Energy Firms: A Capital Market Perspective,” Finance Research Letters, vol. 50, 2023.
[CrossRef] [Google Scholar] [Publisher Link]