For stock markets, uncertainty is worse than war

According to Paweł Majtkowski, an eToro market analyst in Poland, in the event of armed conflicts, markets often react more to the uncertainty that preceded it than to the conflict itself.

"In 2014, during the annexation of Crimea, the biggest drops in the S & P500 index were recorded two weeks before the invasion. Now, the tension is having the greatest impact on commodity prices. The Russian stock exchange also recorded significant discounts," Paweł Majtkowski noted.

Russia's recognition of the independence of the separatist republics in Ukraine opens a new stage of the conflict and increases uncertainty on the financial markets. This is another element, after concerns about the level of inflation and interest rate hikes in the US, that worries investors.

"It is worth noting, however, that from the point of view of the global economy in the medium term, wars have a limited impact on financial markets. Often a greater burden is the pre-conflict tension than the clash itself. In the short term, however, the impact may be significant. For Poland and Central and Eastern Europe, this conflict is a much greater burden. Today the Warsaw stock exchange opened to a significant negative point, but it is slowly recovering,” an expert said.

(WBJ)