Geopolitical Shocks and Emerging-Market Volatility: A Multi-Event Study of the Nifty 50 Index Across Five Global Conflicts (2020–2026)

Abstract

This paper discusses the impact a geopolitical war does on the performance of the Nifty 50 index taken as a proxy of a large, globally integrated emerging market. It uses the recent Iran–Israel war that broke out on 28 February 2026, and four earlier wars (the US–Iran confrontation, the Russia–Ukraine war, the Israel–Hamas war and the Iran–Israel escalation) to see how shocks impact stock return, volatility, abnormal returns (AR), and the speed of market recovery. In a quantitative event-study fashion, the study measures abnormal returns (AR), cumulative abnormal returns (CAR), and realized volatility within a 10-day time window pre- and post-event and a 30-day post-recovery window, using the market model, and tests the significance of the results with a one-sample t-test and Welch's t-test. Among the findings is this: While relatively minor, war events seldom provide statistically significant returns-shifts in the statistics, they do consistently and significantly increase market-volatility, indicating that it is this variable, not the return series per se, that serves as the main channel of geopolitical risk transmission to financial markets. The Russia-Ukraine war resulted in the largest volatility (delta) spike in the sample while the 2026 Iran-Israel war had the deepest and most sustained negative CAR, indicating that markets are attaching more weight in their assessment of more recent and closer conflicts. The magnitude, duration, and worldwide impact of the conflict might be a measure of market resilience, as recovery speed differed across events. The study offers a multi-event, comparative event-study analysis of an emerging market with both statistical testing and visualisation-directed interpretation and potential implications for policymakers and investors who are dealing with risk in the context of geopolitical uncertainty.