Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said a possible Russian invasion of Ukraine would hit stocks more severely than the annexation of Crimea in 2014.
Global stock markets tumbled on Monday (14th) as fears of an imminent invasion intensified. Some countries are urging citizens to flee Ukraine. U.S. President Joe Biden’s national security adviser Jake Sullivan warned on Sunday that an invasion might happen “any day now” and Ukraine has asked for a meeting with Russia within 48 hours.
European stocks fell sharply on Monday, with Oppenheimer saying European stocks will continue to be plagued by volatility until uncertainty over the geopolitical situation in Ukraine subsides.
U.S. stock futures indicated that Wall Street would gap out sharply on Monday, and Asia-Pacific stocks closed down across the board. Oil prices surged to a seven-year high; Germany’s DAX fell 3.4% on heavy exposure to Russian gas, similar to 2014’s decline.
“If you look at some of the recent events, like the annexation of Crimea, it pushed up the risk premium by regarding 20 basis points and had an impact of regarding 5% on the stock market. And this time it might be bigger,” Oppenheimer said on Monday.
“So our estimate that this time around, the risk premium might be pushed up by between 20 and 40 basis points, taking the stock market down more than 5%, seems like a very reasonable estimate.”
Russia’s invasion and annexation of the Crimean peninsula in February-March 2014 sparked an international outcry and a wave of economic sanctions, and military experts say the unusual build-up of Russian troops on the Ukrainian border in recent weeks is similar to what happened before the last invasion. very similar.
“When Russia took action once morest Ukraine in the first half of 2014,” said Holger Schmieding, chief economist at Berenberg.EURDistrict economic sentiment was hardly shaken. “Real GDP growth decelerated from 0.4% q/q in the first quarter of 2014 to 0.2% in the second quarter, before rebounding to 0.5% in the third quarter. Of course, this temporary setback may be more pronounced.”
He pointed out that while Russia is an important military power with great economic potential, it has limited impact on the European economy; Germany only sells 1.9% of its exports to Russia, compared to 5.6% to Poland.
Schmieding said, “relative to the impact this yearEURAll other factors in regional economic performance such as Omicron-induced recession, slow easing of supply chain issues, Fed rate hikes, etc. Sanctions and counter-sanctions may result in some losses in non-energy trade with Russia The impact on European growth prospects two months later is almost negligible. “
As a result, Berenberg expects European equities to rebound soon following any temporary setbacks that a potential attack might cause.
