Title: Does diplomacy influence stock market trends? Analysing the impact of Russia-Ukraine conflict on India and the USA during and after war

Authors: Neha Seth; Baleboina Vengababu

Addresses: School of Management Studies, Indira Gandhi National Open University, New Delhi, India ' Department of Commerce, School of Commerce and Management, Central University of Rajasthan, Ajmer, Rajasthan, India

Abstract: The present paper aims to study the diplomacy influence on the stock market by analysing the impact of Russia and Ukraine's warfare in the long run, short run, dynamic relationships and innovations between Brent crude oil, the Nifty 50 and the S&P 500. So, the study collects the daily closing prices. The entire study period has been split into two sections: before and during the war. The co-integration model is used to examine the long-term relationship. It found that there is no co-integration, also, there is no short-term relationship except for the S&P 500 to Nifty 50 in both periods. While checking the impulse response and variance decomposition, it was observed that before the war, there was a negative trend response in Brent to the S&P 500 and during the war, there was a negative trend response in Brent to the Nifty 50, the S&P 500 to Brent and the Nifty 50 to Brent.

Keywords: Ukraine and Russia conflict; Nifty 50; Brent oil; S&P 500; cointegration; causality; impulse response function; diplomacy.

DOI: 10.1504/IJDIPE.2025.147275

International Journal of Diplomacy and Economy, 2025 Vol.11 No.3, pp.216 - 243

Received: 12 Sep 2023
Accepted: 27 Feb 2024
Published online: 14 Jul 2025 *

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