The Impact of 2022 Russia-Ukraine Conflict on the Financial Market: Evidence from China

Bingning Xue

doi:10.54691/bcpbm.v26i.1826

Authors

Bingning Xue

DOI:

https://doi.org/10.54691/bcpbm.v26i.1826

Keywords:

Russia-Ukraine conflict, Economic impact, Chinese stock market, Energy prices.

Abstract

This paper concerns the effect of the 2022 Russia-Ukraine conflict on the Chinese stock market. The event has caused chain reactions on a global scale, among which the soaring energy prices caught the most attention for having the most significant influence. Using the international crude oil futures’ settlement prices and two market indexes as indicators of energy prices and Chinese stock market performance, this paper mainly focuses on their changes before and after Russia-Ukraine War. The data covers the period from 25 November 2021 to 14 April 2022, and time series analysis methods, including the Vector autoregression (VAR) model and ARMA-GARCH model, are used in the analysis process. Also, this paper conducts impulse response to examine the impact of one unit oil price change on the Chinese stock market index over time. As a result, a significant correlation between the upsurge in the energy prices and the downtrend of Chinese stock market performance can be found after the breakout of the Russia-Ukraine conflict, suggesting that international incidents can cause global turmoil. Nevertheless, for a mature market with good resilience, the influence of the strike would gradually evaded.

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