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

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

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

‘World’s deadliest sea crossing’ claimed six lives a day in 2018: UN refugee agency

Victims of terrorism remembered

2019 EU Budget: Commission proposes a budget focused on continuity and delivery – for growth, solidarity, security

A Sting Exclusive: China’s Foreign Minister Wang Yi on South China Sea issue at the ASEAN Regional Forum

Macron leads EU-wide minimum wage call as Merkel, Medvedev warn of global injustice

EU elections: The louder the threats and the doomsaying the heavier the weight of the vote

I have a rare disease. This is my hope for the future of medicine

5 ways to #BeatAirPollution

‘Deteriorating’ human rights in Belarus amounts to ‘wholescale oppression’: UN expert

Parliament ready to fight for a different EU budget

Here’s how we solve the global crisis of tribalism and democratic decay

Terrorism ‘spreading and destabilizing’ entire regions, Guterres warns States, at key Kenya conference

Health should be central to the conversation around climate change

Is the ECB enforcing the will of the big Eurozone member states on the small? Can the euro area live with that?

Russia must urgently step up fight against foreign bribery

Eurozone’s bank resolution mechanism takes a blow

Insecurity and violence turn Nigeria into a ‘pressure cooker’ that must be addressed, says UN rights expert

As human genome editing moves from the lab to the clinic, the ethical debate is no longer hypothetical

Gender inequality in the medicine field: two commonly issues

A long German political winter is on the way

EU and Japan select first Erasmus Mundus Joint Master Programmes

With millions of girls ‘at risk’ today of genital mutilation, UN chief calls for zero tolerance

Three UN workers killed following Benghazi car bomb attack, as Security Council meets in emergency session, honours their ‘ultimate sacrifice’

Charlotte in Ghana

Parliament to ask for the suspension of EU-US deal on bank data

Parliament criticises Council’s rejection of money laundering blacklist

European Solidarity Corps: Commission opens new call for project proposals

AI can wreak havoc if left unchecked by humans

The Eurogroup offered a cold reception to IMF’s director for Europe

Half of all mental illness begins by the age of 14

Female African coders ‘on the front-line of the battle’ to change gender power relations: UN chief

Health & Sustainable Development Goals: it’s about doing what we can

WEF Davos 2016 LIVE: “It is the implementation, Stupid!”, German Finance Minister Wolfgang Schaueble points the finger to Greece from Davos

Gloomy new statistics signify no end to Eurozone’s economic misery

The business case for diversity in the workplace is now overwhelming

The psychology of pandemics

Here’s how data could make our cities safer

The Parliament sets the way for the European Banking Union

The deforestation risks lurking in the banking sector

European Commission: the LED lights of your Audi A6 shall save our planet

Thousands risk lives fleeing fighting in Syria’s last ISIL stronghold

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

This is what happened to CO2 emissions in the EU last year

Hydrogen power is here to stay. How do we convince the public that it’s safe?

What lessons to draw from the destruction of Syria

Greece will probably stay in the Eurozone but at what cost?

FROM THE FIELD: Hardy seeds bear fruit to protect Colombia’s environment

Mental Health Policy, a significant driver for growth

Children suffering ‘atrocities’ as number of countries in conflict hits new peak: UNICEF

UN says ‘many humanitarian achievements’, one year after ouster of ISIL from Mosul

Convincing the Germans to pay also for the unification of Eurozone

Antitrust: Commission fines US chipmaker Qualcomm €242 million for engaging in predatory pricing

Iran: women hunger strikers entitled to medical care, UN rights experts urge

Second Ebola death confirmed in Uganda as UN health agency mulls global emergency call

Technology can help solve the climate crisis – but it will need our help

Direction Wakanda: finance methods to make Africa a superhero continent

4 things President Trump could learn from Jimmy Carter

COP21 Breaking News_03 December: Europe’s children urge leaders to commit to climate action at UN Climate Summit in Paris

The secret weapon in the fight for sustainability? The humble barcode

More Stings?

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