HomeStock MarketRussian market sinks by 17% amid tensions in Ukraine

Russian market sinks by 17% amid tensions in Ukraine

The Russian stock market sank by 17 percent on Monday amid the further escalating Ukraine crisis. Just a while ago, President Vladimir Putin talked about his country mulling to recognize the independence of the two separatist republics of East Ukraine. The Russian market was not the only one that was affected by the same. Other European markets also joined the league in this regard.

The country also warned about having no firm plans for a summit between Putin and US President Joe Biden. In between all of this, rumours have erupted about Russian forces killing a group of saboteurs. All of them had reportedly breached the southwest border of the country from Ukraine this Monday.

Russian market and the US

The US has argued for the longest possible time about incidents near eastern Ukraine. According to the former, these can be used as a pretext for Moscow to attack the neighbouring country. So, Russia’s invasion of Ukraine is a possibility.

Russian market statistics

The RTS index tracks the Top 50 Russian stocks in dollar terms. The same is done on the Moscow Stock Exchange. Tracking this development, the index plunged down by 230 points. That makes from 16.67 percent to 1,160.24. There is also a fear about the West cutting off dollar access to the companies of Russia. As a result, the Russian Ruble fell to around 78 Rubles in terms of US dollars.  

Wall Street

Wall Street was shut down for an entire day on account of a public holiday. However, S&P500 stock futures still fell by 0.7 percent. Moreover, the Nasdaq futures went down by 1 percent. The French CAC40 went down by 2.07 percent. On the other hand, the German Dax went down by 1.94 percent. Euro Stoxx 50 also sank by 2.13 percent. FYSE100 from the UK lost at 0.4 percent. Lastly, the Spanish IBEX35 went down by 0.7 percent.

People’s opinions

Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services has opined about the current situation. He said, “While the US is consistently trying to engage with Russia, there is no cool off visible yet, and there is no update on the proposed meeting between them.”

Russian market’s impact on Ruble

The Ruble is said to have tumbled the most since March 2020 that marked the worse phase of the COVID-19 crisis. That happened after President Vladimir Putin recognized East Ukraine’s self-declared separatist republics. That already deepened a standoff with the rest of the West. The shocking part was that the Ruble weakened beyond 80 per US dollar.

It happened during Putin’s televised address to the Russians last Monday. That led to the stocks slumping to as much as 18 percent by the evening. Earlier on Monday, the benchmark MOEX Russia equity index closed the main trading session at only 11 percent. This marks the biggest drop since March 2014 that also marked Russia’s annexation of Crimea.

So, both the Ruble and the Russian Market were the worst performers globally on the said day. This equity standoff extended to Asia the next day, with the US index and regional stocks sliding side by side.

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