Author(s)

Yi’ang Li¹, Jiachen Jin^2*, Donglai Lyu³, Que Zheng¹

¹New York University, New York, USA.
²Shanghai International Studies University, Shanghai, China.
³Brandeis University, Waltham, USA.

The research aim of this paper is to investigate whether futures price fluctuations of major commodities during the Russian-Ukrainian war had an increased impact on the volatility of European stock index prices and whether they better explained stock index price fluctuations compared to pre-war commodity price fluctuations. Based on the results based on empirical research data, we tried to further discuss the correlation between strategic commodities of political significance and other global financial asset prices during special periods such as war. As main research method, regression analysis was used to explore whether the price fluctuation of Russia’s main export commodities (natural gas and wheat) better explained Europe’s stock market fluctuation (represented by FTSE) during the 2022 Russian invasion of Ukraine compared to the pre-war period. We compare the correlation between the European stock index and each of the two commodities during the war and before the war. The correlation is examined by investigating whether the changes in the indicators representing the increase in explanatory power are statistically significant. Spearman rank correlation coefficient was used as a more robust version to explain the change.

Commodities, European, Stock Market Fluctuation, Russian-Ukrainian Conflict, Regression Analysis, Hedging Strategy

Li, Y. , Jin, J. , Lyu, D. and Zheng, Q. (2022) Impact of Russia’s Export Commodities on the Europe Stock Market during and before the Russia-Ukraine War. iBusiness, 14, 213-229. doi: 10.4236/ib.2022.144016.