How will the terrorist attack at the Zaporizhzhia nuclear power plant affect financial markets?

With each passing year of life you become more and more pessimistic and begin to believe in the worst, and this is not surprising.

Just a few years ago, no one believed in the possibility of a global war between Russia and Ukraine, but the conflict has already lasted for more than a year.

Now there is talk of a high probability of a terrorist attack at the Zaporizhzhia nuclear power plant, and as sad as it may be, it must be acknowledged that such a probability exists.

If a radiation leak occurs at this facility, the event will affect not only the environment and human health, but also financial markets.

How will stock exchanges react to the destruction of the nuclear power plant?

Stock markets – after the event, the value of most securities will decline, but shares of companies producing drugs that reduce the effects of radiation or producing protective equipment against radiation exposure may soar.

The market decline is unlikely to be long-term and the price will return to its previous levels within a few days.

Commodity markets – here there will be an increase in prices for agricultural products such as wheat, peas, barley, sunflower and sunflower oil.

Ukraine is one of the largest producers of these goods, but after the radiation contamination, it's unlikely anyone will want to buy its products. Therefore, prices will remain high for quite some time.

The currency market will bear the brunt of the impact, with the Ukrainian hryvnia plummeting to new lows. The Russian ruble will also suffer, as Russia is located quite close to the target.

It is highly likely that the EUR/USD currency pair will react with a downward trend to this tragic event, with the US dollar strengthening and the euro declining.

Precious metals – this market segment traditionally responds with growth to negative events. At such times, investors prefer to buy gold bars, dumping dubious securities.

Therefore, a sharp jump in gold prices is expected, followed by a pullback once the situation stabilizes. The current gold price is XAUUSDXAUUSD .

Cryptocurrency is a safe haven in times of crisis; if the Zaporizhzhia Nuclear Power Plant were to be destroyed, this would increase demand for major cryptocurrencies.

People will try to move away from the epicenter of the tragedy, using the most convenient option for moving funds – cryptocurrency .

Given the above, be prepared for the possibility that sharp fluctuations in exchange rates may trigger stop orders or lead to significant losses on open positions. Trading may also be suspended on some exchanges or switched to " CLOSE ONLY " mode.

Therefore, you should be prepared for possible scenarios and secure your positions in advance.