The Dynamics of Safe-Haven Assets and European Stock Markets before and during the Russia-Ukraine War

Abstract

Russia-Ukraine war caused European financial system experienced unprecedented panic because of its reliance and proximity to war areas. The research aims to examine the safe-haven assets and the European stock market dynamics before and during the Russia-Ukraine war. The data spans the six months from September 23, 2021, to September 25, 2022, which are both before and during the Russia-Ukraine War. The stock indices of France, Germany, and Finland were chosen because they represent the largest economies in European Union. The findings indicate a shift in the source and direction of shocks between safe-haven assets and the European stock market before and during the war. Before the war, Finland positively influenced by gold. After the war, France, Germany, and Finland negatively influenced by gold while positively influenced by silver. Important research ramifications for comprehending how the geopolitical crisis interacts with the European financial markets.