The stock market of the Russian Federation experienced its largest drop in the last three years following loud statements from the Russian Foreign Ministry regarding a sharp deterioration in relations with the United States and the lack of prospects for ending the war against Ukraine.
This is reported by Finway
Negative Investor Reaction to Russian Foreign Ministry Statements
Deputy Foreign Minister Sergey Ryabkov stated that relations between the Russian Federation and the US are “destroyed to the foundation”, and that the Kremlin does not observe any initiative steps from Washington. According to Ryabkov, “the momentum after the meeting between Vladimir Putin and Donald Trump in Alaska has been exhausted”. Such statements significantly impacted market sentiment.
“The Russian stock market reacted with its strongest drop in three years to the sharp statements from the Russian Foreign Ministry, which claims that hopes for an end to the war in Ukraine have practically vanished.”
Dynamics of Key Indices and Stocks
On Wednesday, the Moscow Exchange index fell to its lowest level since December of last year. Compared to the close of trading on Tuesday, the index dropped by 4.05%, marking the largest one-day decline since September 2022. Major Russian corporations suffered significant losses: Gazprom fell by 4.1%, Sberbank by 4.9%, VTB by 4.7%, Rosneft by 2.5%, Severstal by 4.9%, and Aeroflot by 5%.
The Moscow Exchange indicators have been declining for the fifth consecutive week. Compared to February, when the negotiations between Putin and Trump took place, the market capitalization has decreased by more than 22%, equivalent to ₽1.3 trillion.