How do geo-political events affect stock markets?
The word geopolitical is either misunderstood or not fully understood by most people. It is actually about the impact of global politics and global international relations on the stock markets . Geopolitics is extremely important as the markets globally get interconnected. For example, when Lehman happened, the entire global trembled. Similarly, when the US and Iran got close to a war in Middle East, it had its impact on oil prices on stocks. When Europe was on the brink of default in 2011, it roiled global bond markets and also equity markets went into a prolonged slowdown. Let us understand these geopolitical factors in much greater detail and how exactly they impact the stock prices. Geopolitics essentially refers to different geographic influences on political and international relations. The virtually seamless interconnection between world markets helps in the transmission of the impact quite fast as we have seen time and again in the past. Here are some major geopoli...