<p>&quot;The Russia-Ukraine war will have a material impact on economic activity and inflation through higher energy and commodity prices, the disruption of international commerce and weaker confidence.&quot; <a href="https://www.ecb.europa.eu/press/pressconf/2022/html/ecb.is220310%7E1bc8c1b1ca.en.html" rel="nofollow noreferrer">Christine Lagarde, President of the ECB</a></p>
<p>&quot;The extent of these effects will depend on how the conflict evolves, on the impact of current sanctions and on possible further measures.&quot;</p>
<p>Higher energy and commodity prices on its own have a negative impact on economic activity. Think of yourself as an individual. If you assume you pay usually 20% of your income for heating, electricity and filling up gas in your car, you have 80% of your income disposible for whatever else. If that fraction jumps to 40%, you will inevitably have to consume less other stuff.</p>
<p>It is not just costs though. According to <a href="https://www.cnbc.com/2022/03/16/russian-ukraine-war-to-lower-car-production-by-millions-of-units.html" rel="nofollow noreferrer">S&amp;P</a>, Russia’s invasion of Ukraine will lower car production by millions of units over two years.</p>
<p>That said, Russia invaded Ukraine on February 24, 2022. While markets initially fell, using the SPX as a proxy, SPX actually closed 8.4% higher on March 29, 2022. SPX declined since, but it is not much lower since the war began. Generally, the factors that drive markets are (expected) earnings (growth),(perceived) risk and discount rates (interest rates / inflation). It is hard to pin down what the actual cause for price changes in markets are but it is not impossible that the changes in interest rates affected the SPX more than the war itself. After all, SPX closed above the Feb 24 level on May 4th (the day the FED raised rates by the biggest hike in two decades).</p>

CC BY-SA 4.0
2022-05-30T08:04:51.037Z
2022-05-30T08:58:08.583Z
2022-05-30T08:58:08.583Z
AKdemy
<p>Why other countries stock market is falling during Ukraine Russia war.
How does it affects others country's stock market.</p>

<finance><economic-growth>
Why other countries stock market fall during war between russia and ukraine
Hadman
# Why other countries stock market fall during war between russia and ukraine

(Asked by: username_0 on 2022-05-28)

Why other countries stock market is falling during Ukraine Russia war.
How does it affects others country's stock market.

**Tags:** finance, economic-growth


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## 1 answers

### Answer by username_1 on 2022-05-30. Score: 1

"The Russia-Ukraine war will have a material impact on economic activity and inflation through higher energy and commodity prices, the disruption of international commerce and weaker confidence." [Christine Lagarde, President of the ECB](https://www.ecb.europa.eu/press/pressconf/2022/html/ecb.is220310%7E1bc8c1b1ca.en.html)

"The extent of these effects will depend on how the conflict evolves, on the impact of current sanctions and on possible further measures."

Higher energy and commodity prices on its own have a negative impact on economic activity. Think of yourself as an individual. If you assume you pay usually 20% of your income for heating, electricity and filling up gas in your car, you have 80% of your income disposible for whatever else. If that fraction jumps to 40%, you will inevitably have to consume less other stuff.

It is not just costs though. According to [S&P](https://www.cnbc.com/2022/03/16/russian-ukraine-war-to-lower-car-production-by-millions-of-units.html), Russia’s invasion of Ukraine will lower car production by millions of units over two years.

That said, Russia invaded Ukraine on February 24, 2022. While markets initially fell, using the SPX as a proxy, SPX actually closed 8.4% higher on March 29, 2022. SPX declined since, but it is not much lower since the war began. Generally, the factors that drive markets are (expected) earnings (growth),(perceived) risk and discount rates (interest rates / inflation). It is hard to pin down what the actual cause for price changes in markets are but it is not impossible that the changes in interest rates affected the SPX more than the war itself. After all, SPX closed above the Feb 24 level on May 4th (the day the FED raised rates by the biggest hike in two decades).


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