The Impact of the Israeli-Palestinian Geopolitical Conflict on Global Financial Markets

DOI

10.2991/978-94-6463-508-9_10How to use a DOI?

Keywords

Event Study; Financial Market; Geopolitical Risk

Abstract

This study examines the global market reaction triggered by the Israeli- Palestinian geopolitical conflict on October 7, 2023. This study uses the event study method. Research data for commodities such as gold, Brent oil, and crude oil was taken from investing.com. Meanwhile, for the global market, several stock indices are taken, such as the Dow Jones Index (USA), IDX Composite (Indonesia), Nikkei 225 (Japan), Hang Seng (Hong Kong), and DAX (Germany). The research period was 85 days, consisting of a 65-day estimation period and a 20-day window period. The date of the Israeli-Palestinian geopolitical conflict, October 7, 2023, falls on a Sunday when all stock markets are closed. The division into window periods is ten days before the conflict event and ten days during the conflict. This research reveals that global markets (DJI Index, IDX, Nikkei, Hang Seng, and DAX) and commodities (Gold, Brent Oil, and Crude Oil) reacted to the Israeli-Palestinian geopolitical conflict during the window period. This is indicated by the significant results during the window period below 5%. Based on the difference test on the average abnormal returns, there is no significant difference between the average abnormal returns before and during the conflict. The results prove that the Israeli-Palestinian geopolitical conflict affects global markets and several commodities because it allows for a reaction to the conflict, thus providing a reference for market players to secure their assets during the conflict. However, responses to the situation were similar before and during the conflict.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ryan Dwi Prayoga
AU  - Muhammad Randhy Kurniawan
AU  - Ali Zainal Abidin
AU  - Aflit Nuryulia Praswati
PY  - 2024
DA  - 2024/09/19
TI  - The Impact of the Israeli-Palestinian Geopolitical Conflict on Global Financial Markets
BT  - Proceedings of the Twelfth International Conference on Entrepreneurship and Business Management 2023 (ICEBM 2023)
PB  - Atlantis Press
SP  - 119
EP  - 127
SN  - 2667-1271
UR  - https://doi.org/10.2991/978-94-6463-508-9_10
DO  - 10.2991/978-94-6463-508-9_10
ID  - Prayoga2024
ER  -