Moscow stocks tumble as diplomatic talks spark market jitters
The Moscow Stock Exchange reacted with declines to the diplomatic talks taking place in the capital of Saudi Arabia. Although the MOEX index reached 3,300 points, the highest since May of last year, many companies are experiencing 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. Particularly important for investors is the declaration to establish teams to work on ending the conflict in Ukraine and the planned creation of a consultative mechanism for addressing sensitive issues in U.S.-Russia relations.
Significant declines in the industrial sector
Among the companies recording the largest losses was Raspadskaya, whose shares fell by 6 percent. The energy sector also faced problems - KubanEnrg lost 5.5 percent of its value. A significant drop of 4.5 percent was also noted by developer PIK.
The banks' shares also lost value. VTB Bank recorded a decline of 4.1 percent, and Moskovskiy Kreditnyi Bank fell by nearly 4 percent. AFK Sistema lost 3.4 percent, and Severstal's shares decreased by 3.3 percent.
Resource companies under pressure
Despite the overall optimism regarding a possible end to the war, Gazprom lost 3.2 percent of its value during the session. Declines also affected other resource companies - Alrosa, engaged in diamond mining, lost 2.4 percent.
On the Moscow market, shares of technology and transport companies also decreased. Yandex lost 3.1 percent, Federal Grid over 3 percent, and Aeroflot nearly 3 percent.
Despite these declines, investors remain optimistic about the future. They are particularly hopeful for a softening of Washington's stance towards Moscow and the possibility of lifting sanctions. The potential reintegration of the Russian capital market into the global financial system could significantly increase exports and lead to an inflow of foreign investments to the Moscow Stock Exchange.
However, the Bank of Russia maintains a cautious stance regarding these hopes. The main interest rate remains high at 21 percent, and monetary authorities do not rule out further increases in the coming month.
