What was the Impact of the Russian War in Ukraine on Global Stock Market Sectors in 2022?

Abstract

The Russian Federation's war of aggression against Ukraine has prompted reallocations in equity investments around the world. Overall portfolios were adjusted globally. There were many losses but also gains. This article analyzes the impact of the Russian war in Ukraine on global stock market sectors. With this, we would like to answer the following questions: what impact did the Russian war have on the biggest companies worldwide, and what expectations do investors have about the development of the respective business models operating in different stock market sectors. In addition to analyzing the major stock market indices in other studies, we focus on the impact on various market sectors. This is important as sector indices are used to apply a specific stock strategy and to hedge the risk of individual stocks belonging to a particular sector. By doing an event study, we analyzed abnormal returns and cumulative abnormal returns of the 11 different MSCI World sector indices. We have evidence that on 24th February, the beginning of the Russian attack, almost all sectors had negative abnormal returns. The development would be more differentiated from the stock market sectors in the following days. Our analysis of cumulative abnormal returns shows to what extent the abnormal returns are sustainable.