Russia’s stock market plunged to record low as Moscow launched a military operation against Ukraine on Thursday, 24 February, Financial Times reported.
The Moex index fell by a record 45 percent before it recovered to 30 percent in the early trading hours. The Russian rouble fell to a disastrous low against the United States (US) dollar amid a dramatic escalation on Thursday in the long-brewing conflict.
Shares of oil and gas companies were down as well. Energy corporation Gazprom's stock fell by 33 percent, while Lukoil and Novatek fell by 30 percent each, as per the reports by Financial Times.
The current shocks in the market clearly indicate that Russians were expecting President Vladimir Putin to de-escalate the conflict.
“For the time being, it’s hard to see what could be a trigger for the market to stabilise," Emmanuel Cau, head of Europe's equity strategy at Barclays, told Financial Times.
Moscow Stock Exchange Suspends Operations
The Moscow stock exchange stated on Thursday that it had stopped operating because of the rouble falling to a low of 89 compared to the US dollar after reports of explosions across Ukraine emerged.
However, the rouble recovered to some extent when the central bank stepped in to stabilise the economic fallout.
Luis Saenz, head of international distribution at a Russian investment company called Sinara, told Financial Times, “At this point in time, people are saying ‘get me out and get me out at any price.'" She also added that people were expecting the upcoming round of sanctions to have a massive impact on the Russian market.
Russia's bond prices also tanked on Wednesday as the market responded to the imposition of crippling sanctions by the Western nations.
Some fund managers believe that the restrictions imposed this week on bonds could be a precursor to more stringent curbs, which could effectively put a blanket ban on the buying and selling of Russia's current debt.
(With inputs from Financial Times.)
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