The Impact Of Geopolitical Conflicts On My Country's A-share Marke

In recent years,with the acceleration of globalization,geopolitical conflicts occur frequently and have gradually become an important risk factor in the global financial market.In times of international political turmoil,geopolitical risks can have a significant impact on the global economy and financial markets.Therefore,it is increasingly important to study the impact of geopolitical conflicts on financial markets.February 24,2022 With the outbreak of the conflict between Russia and Ukraine,the Chinese stock market has seen sharp fluctuations.Therefore,this paper aims to study the impact of geopolitical conflicts on China’s stock market by taking the Russia-Ukraine conflict as an example.Specifically,this paper will discuss the impact of the Russia-Ukraine conflict on China’s stock market,including the changes of stock prices,turnover rate,rise and fall and other indicators before,during and after the event,and analyze the influence mechanism of geopolitical conflicts on the stock market and the differences in stock market responses.This paper first adopts the event study method to explore the impact of the Russia-Ukraine conflict on the overall Chinese stock market,and then conducts a systematic study according to the industry classification of Shenyin & Wanguo Industry Classification 2021 Revision,to explore the differences between the Russia-Ukraine conflict and specific industries in China.Finally,this paper uses the fixed effect model to explore the Russia-Ukraine conflict impact on our stock market,through the research found:First of all,after the outbreak of the conflict between Russia and Ukraine,the overall Chinese stock market initially showed a positive significance,and began to show a precipitous decline on the seventh day,indicating that the outbreak of the conflict between Russia and Ukraine initially had a positive impact on China,and in the 21-day event window,there were 19 trading days in which the cumulative excess return was significant at the level of 1%.It shows that the impact of Russia-Ukraine conflict on our A-share market is statistically significant.Secondly,the Russia-Ukraine conflict has affected different industries in different degrees,including positive impact,negative impact and insignificant impact.The listed companies with positive impact account for the largest proportion,up to59%,while those with negative impact and insignificant impact account for 11.8%and 29.2% respectively.It is verified that there are positive and significant results when studying the influence of the conflict between Russia and Ukraine on China’s A-share market.Finally,during the Russia-Ukraine conflict,the geopolitical risk index,investor sentiment index and risk index had a significant negative relationship with the rise and fall of the Chinese stock market and the extraordinary return rate,and had a significant positive impact on the turnover rate of the Chinese stock market,all of which were significant at the level of 1%.This indicates that with the increase of the attention of Chinese investors to the Russia-Ukraine conflict,One after another chooses to turn investors’ eyes to the relative safety of the industry or the market,this move causes our stock market turnover rate to increase.In addition,with the increase of risk index,foreign investors will be more willing to transfer their assets to a safer and more stable market,and some of them will turn their eyes to China.Therefore,the normal returns estimated by market models will increase,leading to the decrease of extraordinary returns.