Crimean crisis: not enough to slow down European indices

Press conference by Michel Barnier, Member of the EC, on the adoption by the EC of a company law and corporate governance package

Press conference by Michel Barnier, Member of the EC, on the adoption by the EC of a company law and corporate governance package

Two months and 19 days have passed since the commencement of the international crisis between Russia and Ukraine. Starting with the Ukrainian revolution which resulted in the President Viktor Yanukovych’s deposition and continuing with the formation of an interim government, Ukraine is now facing one of its most severe “battles” in its after-Soviet history. Europe and especially the European stock exchanges cannot remain unaffected by this crisis.

Main European indices at a glimpse

Germany is represented by the Deutsche Boerse AG Stock Index DAX which consists of 30 German blue chip stocks traded on the Frankfurt stock exchange. DAX 30 was 9708.94 on the 24th of February when the crisis began and 9607.40 on the 8th of May. This means a total decline of 1% while experiencing several ups and downs during the aforementioned period. If we take a closer look at the past 3 month’s trend, it is clear that the index is in a downward movement with the possibilities to climb up to past levels more likely.

CAC 40 Index reflects the 40 largest equities listed in France and is the main indicator of the Paris market. This Index showed a rise of 2% and a slight upward trend during this period.

FTSE 100 Index is a capitalized-weighted index of the 100 most highly capitalized companies traded on the London Stock Exchange. We observe a decline of 0.38% where FTSE 100 closed at 6865.86 on the 24th February and 6839.25 on the 8th of May. Furthermore, the index’s route was downward till the 15th of April but was moving upward for the rest of the period. That is not strange but connected to the crisis due to the fact that the Ukrainian parliament declared Crimea as a territory temporarily occupied by Russia at this specific date (April 15th).

An overall view of the European stock exchanges is reflected in the STOXX Europe 600 Index which is derived from the STOXX Europe Total Market Index. The STOXX Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. In particular, STOXX 600 was 338.19 on the 24th of February and 339.56 last Thursday. Thus an increase of 0.4% during this period mirrors the small but positive situation that is prevailing in Europe.

European indices appear more stable than Russia’s index

If we include in our analysis the main indices of Russia and Ukraine, we can come up with more conclusive results. On the one hand, Ukraine’s equities Index climbed from 933.91 to 1075.97 in the weekend before the crisis to close at 1101.91 on last Thursday’s session. On the other hand, MICEX Index (Russia) fell 7.9% in the period investigated, from 1489.01 to 1371.42. It is very interesting though the fact that it experienced a huge drop of 13% in only 8 days (24/02 – 03/03). The two opposite movements of the two indices in just a few days were purely affected by the beginning of the Crimean crisis.

Overall, we see that the main European indices, except for the DAX 30 which has been influenced more till now, seem to have a long-term trend to go back to the pre-Crimean crisis. That implies that they are not affected to a great extent by this political turbulence or that there are other factors that keep these indices in a steadier course. However, the indices of the countries involved are highly affected by the events that are taking place in both countries. We observe that especially Russia’s index drop of 118 points compared to its pre-crisis levels.

Selling may not be the best option for the moment

Judging from what we have already seen, we can say that this is not the time to sell European stocks. Investors should hold and not be frightened by the unstable political environment of Ukraine. This is also supported by past geopolitical crises aftermath where in the end everything comes back to normal, the market recovers and reaches levels that are higher than the ones that were before crisis. Consequently, it is better for investors to rebalance their portfolio in a less frequent basis in order not to be influenced by the short-term events and face harsh losses.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Governments adopt UN global migration pact to help ‘prevent suffering and chaos’

This massive project in Spain is the latest milestone in Europe’s solar power boom

Continuing incarceration of women’s rights activists in Saudi Arabia, ‘reprehensible’: UN experts

Ongoing insecurity in Darfur, despite ‘remarkable developments’ in Sudan: UN peacekeeping chief

Youth employment crisis easing but far from over

The jobs forecast is unsettled. It’s time for a reskilling revolution

How I met the Panda Woman

EU Commission: Germany can make Eurozone grow again just by helping itself

Imported and EU fisheries products should be treated equally

Worth going ‘extra mile’ for a new Syrian constitution, UN envoy urges

UN chief calls for ‘far greater support’ for Cyclone Idai response

EU Commission: The banks are not obliged to finance the real economy

The European Sting @ European Business Summit 2014 – the preview

Malta: investigation risks being compromised while Prime Minister is in office

Von der Leyen on Europe Day: What does Europe mean to me and why is solidarity more valid than ever

Black Panther’s ‘General Okoye’ joins the fight against gender-based violence

Parliament elects the von der Leyen Commission

‘Provocative actions and inflammatory rhetoric’ destabilizing Middle East, warns top UN official

How close is the new financial Armageddon? IMF gives some hints

Inspired by orange peel, this ‘plastic’ packaging is totally compostable

UN launches new project to address link between terrorism, arms and crime

We need to protect 30% of the planet by 2030. This is how we can do it

Cohesion Policy: EU invests €880 million to improve Poland’s railway system

‘Safe Eurobonds’: a new trick to betray the south euro area countries

The 2019 European elections: A pro-European – and young – electorate with clear expectations

Back to school: Schoolchildren to receive milk, fruits and vegetables at school thanks to EU programme

G20: Less growth, more austerity for developing countries

Why we need to rethink geo-economics to beat climate change

Why vaccines are not just for children

People are scared of artificial intelligence – here’s why we should embrace it instead

Developing countries should not be liable for emissions ‘accumulated throughout history’, key UN development forum hears

The Red Cross’s health chief explains how business must respond to coronavirus

Climate change recognized as ‘threat multiplier’, UN Security Council debates its impact on peace

Africa Forum aims to boost business, reduce costs, help countries trade out of poverty

SMEs are the most valuable partners. Here’s why

It’s not just the protests. Here’s how young people are helping the planet

‘Bring to life’ precious moments caught on film or tape, UN agency urges on World Day

The EU Spring Summit set to challenge austerity

NEC @ European Business Summit 2014: The Digitally Enabled Grid

Mirrored classroom display highlights scale of massive education crisis

Europe is designing satellites that ‘surf’ their way past space debris

European Business Summit 2014: The role of youth entrepreneurship education in EU’s Strategy for Competitiveness

In tech-driven 21st century, achieving global development goals requires closing digital gender divide

The mental domain in times of a pandemic

How regenerative agroforestry could solve the climate crisis

UN launches plan to promote peace, inclusive growth in Africa’s Sahel

COP21 Breaking News_03 December: Argentina Accepts KP Amendment

Central America: drought, resulting crop losses threaten food security of two million people, UN warns

Hospitals in Yemen attacked, disrupting healthcare for thousands of vulnerable civilians

EU funds must reach media and creative sector, say MEPs

Multiprofessional action against the indiscriminate use of antibiotics

The business case for investing in sustainable plastics

Eurozone: Even good statistics mean deeper recession

The EU Commission predicts a decimated growth in the next years

Friday’s Daily Brief: UN chief in China, counter-terrorism, updates from Bangladesh, Mali and Mozambique

This start-up made doing good a business priority – and flourished

Drug laws must be amended to ‘combat racial discrimination’, UN experts say

An introduction to ‘Eco-Medical Literacy’ and its importance in shaping expert medical professionals

Here’s how to make ‘value-based healthcare’ a reality

Alexis Tsipras against internal and external “enemies” in pursue of a two-phase deal now

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s