Stock markets’ reaction to the Russia–Ukraine crisis: GCC countries vs Europe

Purpose This study investigates how the Russian invasion of Ukraine affected the stock markets of the Gulf Cooperation Council (GCC) countries in comparison to Europe and explores the varying responses of GCC markets. Design/methodology/approach Using an event study framework, the impact of the Russian invasion on equity markets in Europe and the GCC countries was analyzed by calculating abnormal returns around the event day, February 24, 2022. The study’s null hypothesis posits that abnormal returns on and around the event day are zero. Findings The analysis of abnormal returns revealed a negative impact of the event on both Europe and the GCC countries on the event day. While European markets continued to show negative abnormal returns, GCC markets rebounded with positive abnormal returns. The study also found diverse responses among GCC markets. Originality/value This paper is the first to examine the effects of the Russian invasion of Ukraine on the GCC countries and compares the market reactions to a political event in an energy-exporting region versus an energy-importing region. It also highlights the differences in responses among GCC stock markets, which may be influenced by market size and energy exports to Europe.