No Brexit, post-Brexit, maybe Brexit next year or the following year. Within a timespan of only a few days before and after the referendum in the UK on June 23, investors have been confronted with a variety of scenarios about Britain's and Europe's economic and political future. Unsurprisingly, financial markets took a roller coaster ride.

During the week before the referendum, risk assets – particularly European equities – boomed; on June 24, when Brexit seemed a certainty, they collapsed and safe haven assets (bunds, gilts) and currencies (the Japanese yen) gained; and in the following week stocks and other risk assets rebounded, before another mild correction set in.

Stock markets in Eastern Europe have not escaped the turmoil. The dust has not settled yet – reflecting the uncertainty about how and when the Brits will proceed and how the Europeans will respond – but some notable trends have emerged:

First, in contrast to other periods of global market turbulence, emerging market (EM) equities have been less volatile than developed markets (DM) (see Fig. 1). Immediately after the referendum, EM stock markets posted smaller losses relative to developed markets and gained less in the subsequent rebound. Two weeks after the event, both EM and DM stock indices are back at the pre-referendum levels (in local currencies).

This is unusual, although not completely surprising. In most cases, a flight toward safety, usually coming together with a strengthening dollar, have been associated with EM weakness. However, this time investors are responding to the fact that the fundamental implications of Brexit (or whatever will follow from the referendum) is first and foremost a European problem.

Second, the fact that Brexit is mainly a European issue also shows in the post-referendum performance within the emerging markets universe itself. Asian and Latin American equity markets were hit less by the outcome of the referendum than their European peers and in the meantime they have recovered all losses. Unsurprisingly Emerging European stock markets – which comprises both EU members (Poland, Czech Republic, Hungary, and Greece) and non-EU members (Russia, Turkey) posted bigger losses and the following rebound has been lackluster.

Third, within Emerging Europe, the main victims were the equity markets and currencies of EU member states. In contrast, the Russian and Turkish assets proved relatively resilient. Across the region currencies have been dragged lower by the Euro's weakness against the dollar, but the impact was much more pronounced among the EU member states in this asset class. Similarly, the Polish and Czech equity markets corrected broadly in line with Western Europe.

Stock markets in Hungary and Romania (which technically is a frontier market and not part of the MSCI Emerging Europe index) fared better in local currency terms, reflecting the fact that the leading stocks in both markets have very little direct exposure to Europe. The worst performer was the Greek market, which was dragged down by the collapse of the banking shares.

Across emerging Europe, the direct fallout from Brexit through trade relations with Great Britain seems manageable. Exports to the UK account for 6-7% in Poland and Turkey, but is considerably smaller in the other countries. Exports will not disappear overnight, even in the case of Brexit.

Weaker Eurozone growth, less EU funds

The immediate fallout for Eastern European EM-members and Greece is probably related to the risks of an economic downturn in the Eurozone and to fears of a further disintegration in Europe. Since the referendum, the consensus forecast for the Eurozone has already been cut by 0.1 percentage points both for the current year and for next year, and more downward revisions will likely follow.

Moreover, all EU-members in the region have been recipients of EU-funds which will likely shrink in a Brexit scenario, given that Britain is a net contributor to the EU budget. Markets also fear that in the wake of the Brexit-debate, EU-authorities will be less inclined to resist anti-market policies in Poland and Hungary, although it is doubtful whether this effect can explain any of the recent market movements.

Whether Russia and Turkey will be able to escape the Brexit-related turmoil also in future is difficult to say. If – as it seems now – the divorce between Great Britain and the European Union will be a lengthy affair without any real climax in the foreseeable future, European economies and markets will suffer, but the spillover to other regions will likely be contained.

On the other hand, it is easy to paint scenarios in which the divorce process gets out of control, massively hurting both the British and the European economy and/or the effectiveness of European institutions in dealing with the union's other looming problems (think of migration or Italian banks). A major European crisis could trigger a massive flight to safety, a strengthening of the dollar and surge in market volatility. In this case the ramifications would certainly be felt across the entire emerging market universe. 

Peter Szopo is chief equity strategist at Erste Asset Management. Any views expressed are his own.