Moscow stock exchange hit by declines despite diplomatic progress
The Moscow stock exchange saw declines following diplomatic talks in Saudi Arabia's capital. Although the MOEX index reached 3,300 points, the highest level since May of last year, many companies are experiencing significant drops in valuations.
The market initially responded positively to the meeting between U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov. The announcement of teams being formed to work on ending the conflict in Ukraine and the planned establishment of a consultative mechanism for "sensitive" issues in U.S.-Russian relations holds particular importance for investors.
Significant declines in the industrial sector
Among the companies facing the largest losses was Raspadskaya, whose shares fell by 6 percent. The energy sector also encountered problems, with KubanEnergi losing 5.47 percent of its value. Real estate developer PIK experienced a significant decline, dropping 4.45 percent.
Bank shares also diminished in value. VTB Bank saw a decline of 4.12 percent, and Moskovskiy Kreditnyi Bank dropped nearly 4 percent. AFK Sistema fell by 3.36 percent, and Severstal shares decreased by 3.3 percent.
Resource companies under pressure
Despite the overall optimism related to the potential end of the war, Gazprom lost 3.15 percent of its value during the session. Other resource companies were also affected; Alrosa, involved in diamond mining, lost 2.4 percent.
On the Moscow exchange, shares of technology and transportation companies declined as well. Yandex fell by 3.12 percent, Federal Grid dropped more than 3 percent, and Aeroflot nearly 3 percent.
Despite these declines, investors remain hopeful about the future. They are particularly optimistic about a possible softening of Washington's stance towards Moscow and the potential lifting of sanctions. The reintegration of the Russian capital market into the global financial system could significantly boost exports and attract foreign investments into the Moscow stock exchange.
However, the Bank of Russia maintains a cautious outlook regarding these prospects. The main interest rate remains high at 21 percent, and monetary authorities do not rule out further increases in the coming month.
