REACTION AND ADAPTATION OF THE STOCK MARKETS TO THE FULL-SCALE INVASION OF UKRAINE

Abstract

This article investigates the reaction and adaptation of stock markets in response to the Full-Scale Invasion of Ukraine in February 2022. It examines the immediate effects on the Ukrainian stock market, highlighting the significant decline in trading volumes and stock prices due to geopolitical uncertainty. The study analyzes the behavior of major indices, including the PFTS and S&P 500, and explores investor sentiment during this crisis. Notably, while the S&P 500 experienced an initial drop, it rebounded as investors perceived a buying opportunity, reflecting resilience in more diversified markets. In contrast, the Ukrainian market faced severe disruptions, prompting regulatory responses and measures to restore confidence. The paper also considers gold’s reaction as a safe-haven asset, emphasizing its role in mitigating risks amid heightened geopolitical tensions. The findings underline the complexities of market dynamics during crises and the varying impacts on domestic and international investors.