As the war lingers, it's business as usual for markets

• When the news of the war hit the world, it caused a huge upheaval in commodities availability, supply issues as prices skyrocketed.
• Strange as it may sound, no one seems to be worried or bothered about the war outside of Ukraine.
• It is not just the fact that there is no impact of the war, the expected recession is also missing, explains why markets there are so bullish.

The Russia-Ukraine confrontation seems to be like an event which began just the other day or yesterday, but would be marking its first anniversary on February 24.

When it began, it appeared as if it would be a short affair lasting a couple of weeks or maybe if stretched, a couple of months. Time flies and so has this event.

Today, except for those involved with the confrontation, Russia and Ukraine, the world seems to have forgotten the event. It's like nobody else is affected and hence not bothered.

World markets were impacted when the confrontation began. The time was just after the world had more or less recovered from the second wave of Covid pandemic and things were near normal. When the news of the war hit the world, it caused a huge upheaval in commodities availability, supply issues as prices skyrocketed.

A country like India exported some wheat in the initial stages before the government clamped down on the same. Crude prices rose sharply and Russia tweaked the way it sells crude to counter sanctions imposed on itself by the Western world.

The big beneficiaries were China and India because they found land routes to get crude oil for their consumption, and at substantially discounted rates as well.

World commodity prices and supply chains have recovered from the war shocks and things are back in place to pre-war and pre-Covid levels. It took a while and a lot of prices had to fall sharply before this was achieved. Today, things are more or less back to normal.

The only place which is affected continues to be Ukraine, which is under threat.

Immediately after the outbreak of the war, stock markets globally were affected and fell. No one was sure what could be the damage and for how long. They recovered from the losses and seem to be on a roll across the world. What could be termed as surprising or puzzling is the way European stock markets are behaving.

One thought that the war would affect Europe the most, as Russia and Ukraine are big suppliers to Europe. Oil and gas are big sources of worry for Europe. However, and contrary to expectations, markets in Europe led by FTSE (British), CAC (French) and DAX (German) stock exchanges are trading at new highs.

It is not just the fact that there is no impact of the war, the expected recession is also missing. This probably explains why markets there are so bullish. While financial aid has been given to Ukraine along with big consignments of armaments and ammunition, it appears that the situation is nowhere near resolution. New conditions seem to be the biggest hurdle for resolution.

Coming to India and its markets, we made lifetime highs on the 1st of December and are less than 5 er cent away from those highs currently. We seem to be trading in a broad range of less than 2-3 per cent of the lifetime highs. Strange as it may sound, no one seems to be worried or bothered about the war outside of Ukraine.

The US has had the worst of inflation and interest rates there have risen quite sharply. Economic data suggest that the economy is doing well and therefore one can expect that interest rate rise would continue, though at a reduced pace. The threat of recession haunts the US currently, even though there are no signs of it as yet.

What is the road ahead? Resolution of the war? Unlikely, as neither side seems to be in a hurry. Status quo seems to suit everybody. Commodity prices have returned to normal, so the pain has subsided. Markets are doing fine, so there is no cause for worry.

Unfortunate, but that is the reality.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)