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Ukraine invasion will deal harder blow to stocks than Crimea invasion: Goldman Sachs

Global equity markets have mostly fallen in volatile trading lately, with Europe's Stoxx 600 index down 1.7% on Monday and Wall Street's S&P 500 opening lower as well, after White House National Security Advisor Jake Sullivan claimed Russia could invade Ukraine "any day now."

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Washington: Should conflict reignite in Ukraine, the negative impact to stock markets would likely be worse than in 2014 when Crimea reunited with Russia, a senior analyst at Wall Street bank Goldman Sachs told CNBC.

“If we look at some of the recent episodes — if we look at the annexation of Crimea, for example — we think it pushed the risk premium up by about 20 basis points, which had roughly a 5% impact on the equity market, and this would probably be bigger,” Goldman Sachs Chief Global Equity Strategist Peter Oppenheimer said.

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Global equity markets have mostly fallen in volatile trading lately, with Europe’s Stoxx 600 index down 1.7% on Monday and Wall Street’s S&P 500 opening lower as well, after White House National Security Advisor Jake Sullivan claimed Russia could invade Ukraine “any day now.”

The Stoxx 600 has fallen by almost 6% since the start of 2022, while the S&P 500 has lost more than 7%. “So the sort of moves that we’re seeing – perhaps an adjustment of risk premia between 20 and 40 basis points, – that could in itself reduce the equity market by a little bit more than 5% seems reasonable,” Oppenheimer said.

In the March 2014 referendum, Crimea voted to secede from Ukraine and rejoin Russia. Kiev and Western countries refused to recognize the move and placed sanctions on Moscow. Russia insists that the referendum was held in accordance with the law and the issue is now historically closed.

Over the past months, the West has been accusing Russia of building up troops near Ukraine. Moscow denies having any intention of invading Ukraine, saying that the claims is intended to justify NATO and the US deploying more troops and weapons close to Russian borders. 

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