The threat of war is being felt in the financial markets.
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The Bel20 closed 1.9 percent lower on Monday. Other European stock markets also closed with similar losses. Wall Street remained closed on Monday. For a long time, investors assumed that the likelihood of a war between Russia and Ukraine being limited. But now markets have to take this into account. However, it is very difficult to estimate its precise impact.
‘It is very difficult for an investor to anticipate such a conflict,’ says Luc Aben, chief economist at Van Lanschot Kempen. “The ultimate effect on the economy and markets will depend on the scale and duration of any conflict. Experience also shows that such an effect, although severe, is often short-lived. If the situation doesn’t get dramatically out of hand, investors will eventually pick up the thread of economic fundamentals.”
However, there are also growing fears that the war could have an impact on the real economy if the war further disrupts the gas supply to Europe. and further push up gas and oil prices. That, in turn, could fuel inflation even more, pushing interest rates even higher. The stock market that is suffering the most from the tensions for the time being is that of Moscow itself. On Monday, the Moex index fell 9.5 percent. Since the beginning of this year, the Russian stock market has already fallen 25 percent.
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