What happens to stock markets if Russia invades?

General
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It’s a miserable but unavoidable thought for investors currently…

What if Russia does attack/invade Ukraine? What happens to stock markets?

Would market falls be a buying opportunity? And if the crisis does (hopefully) blow over peacefully, where does that leave the investment outlook?

This FT piece doesn’t seem very keen on emerging markets, for example:

Emerging markets: all risk and few rewards?
As inflation spirals and growth rates slow, the case for investing in emerging markets has rarely been weaker

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It’s very difficult to assign stock market moves to any single event - we all love to do it, but ultimately it’s impossible to isolate say an invasion from high inflation, from that days company results etc.

But in general I’d say my base case would be for a relatively small fall in developed market stocks - maybe more in Europe, then UK and US with smallest impact.

However if you believe any invasion would be limited in scope, and not invoke WWIII then it could be the markets could ignore the event or even rise - given it removes some uncertainty.

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Moody’s are doing an interesting looking webinar that might be of interest

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The markets have already spoken on Russian Corporate debt!

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Yes, if you put aside the sheer horror of any fighting and bloodshed and view this simply as a (dangerous) political game, market falls and lower share prices than a month ago might be seen as an opportunity for investors.

Or…is the Ukraine crisis just a distraction from the bigger economic/financial picture for markets?

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Why Ukraine is bad news for emerging markets generally - from the Financial Times

Emerging markets recoil from Ukraine war shock
Russian invasion adds to concerns over impact of higher prices for oil and other commodities