Moscow stock exchange tumbles amid post-Riyadh optimism
The Moscow Stock Exchange reacted with declines following diplomatic talks in Riyadh, Saudi Arabia. Although the MOEX index reached a level of 3,300 points, the highest since May of last year, many companies experienced significant downturns in their valuations.
The market initially responded positively to the meeting between U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov. Of particular significance to investors is the declaration of the formation of teams to work on ending the conflict in Ukraine and the planned creation of a consultative mechanism for addressing "sensitive" issues in U.S.-Russian relations.
Significant declines in the industrial sector
Among the companies recording the largest losses was Raspadskaya, whose shares fell by 6%. Problems also affected the energy sector, with KubanEnergo losing 5.47% of its value. Developer PIK reported a significant decline of 4.45%.
The value of bank stocks also fell. VTB Bank recorded a decline of 4.12%, and Moscow Credit Bank dropped by nearly 4%. AFK Sistema lost 3.36%, and Severstal shares decreased by 3.3%.
Resource companies under pressure
Despite the general optimism associated with a potential end to the war, Gazprom lost 3.15% of its value during the session. Declines also affected other resource companies, with Alrosa, engaged in diamond mining, losing 2.4%.
Shares of technology and transportation companies also fell on the Moscow market. Yandex lost 3.12%, Federal Grid over 3%, and Aeroflot nearly 3%.
Despite these declines, investors remain optimistic about the future. They are particularly hopeful for a softening of Washington's stance toward Moscow and the possibility of lifting sanctions. The potential reintegration of the Russian capital market into the global financial system could significantly boost exports and lead to an influx of foreign investments into the Moscow Stock Exchange.
The Bank of Russia, however, maintains a cautious stance regarding these hopes. The main interest rate remains at a high level of 21%, and monetary authorities do not rule out a further increase in the next month.
