Russian equities fell sharply in choppy trading on Monday, as fears grew that Moscow would start an invasion of Ukraine shortly. After Moscow said it had destroyed two Ukrainian military vehicles crossed into Russian territory, the Moex index dropped as much as 17%. According to Refinitiv statistics, the Moex is on course for its worst single-day drop on a closing basis since the financial crisis in 2008.
“It doesn’t feel panicky, but it does feel like the market has moved into a stronger form of risk aversion,” said Altaf Kassam, State Street’s head of investment strategy and research.
Rosneft, Russia’s largest oil company, had its stock drop about 20% in Moscow on Monday and has lost nearly 30% of its value since the beginning of the year. Gazprom, the state-owned gas company, fell almost 16% before reversing part of its losses, bringing the 2022 plunge to 19%. The stock of gas producer Novatek was down 12%.
Food company Magnit, which has lost more than a tenth of its value, and bank VTB, whose shares fell nearly 19% on Monday, have also been hit by the Russian asset sell-off. If Russia invades Ukraine, UK Prime Minister Boris Johnson promised to impose economic sanctions and prevent Russian companies from raising funds on UK markets over the weekend.
According to Charles Hall, head of research at UK-based investment firm Peel Hunt, Monday’s share price drops were proof that proposed Western sanctions on Russian corporations “would be troublesome” for investors.
According to Natalia Lavrova, senior economist at BCS Global Markets in Moscow, the fear of stronger Western sanctions weighed on Russian assets and the rouble.
Edited by- Subbuthai Padma
Published by- Radhika. N
