The Russian Stock Market Has Plummeted To A Record Low Since The Mobilization

There is a wave of panic selling.

After closing in the red for 15 consecutive weeks, the Russian stock market began the new trading week with its sharpest plunge in four years, according to The Moscow Times.

During trading on Monday, June 22, the Moscow Exchange Index fell by 4.65%, marking its sharpest intraday decline since late September 2022, when Vladimir Putin announced a “partial mobilization.” At the close of the main session, the index—which includes shares of Russia’s 46 largest companies—dropped to 2,318.2 points, its lowest level since March 17, 2023.

Without exception, all “blue-chip” stocks ended the day lower: Gazprom fell 4.4% and hit its lowest level since late 2008, while Rosneft shares suffered their sharpest decline since 2022—down 7.3% on the day. Shares of Novatek, VTB, and Aeroflot lost more than 5%; Lukoil and Rostelecom lost more than 3%.

“Panic selling is already underway” in the market, notes investment banker Evgeny Kogan. The reasons remain the same, he lists: the lack of negotiations on the Russia-Ukraine conflict, the Russian Central Bank’s hardline stance, and the increasing frequency of attacks on Russian infrastructure.

“Russian stocks have come under attack from several fronts at once,” states Finam analyst Dmitry Lozovoy: the economy is slowing down, taxes are rising, the Central Bank is keeping the key rate high, and the fuel crisis threatens to send inflation soaring. Finally, the U.S. has officially lifted sanctions on Iran and granted Iran permission to trade oil, Lozovoy points out. This promises a drop in oil prices, which will affect export revenues and budget revenues.

Gennady Zyuganov unexpectedly added fuel to the fire by calling for the confiscation of citizens’ savings. “It was precisely after these comments spread that the sell-off accelerated significantly, as investors’ fears intensified regarding possible administrative pressure on the financial sector and private savings,” Lozovoy notes.

The main reason for the market’s decline, however, is the escalation of tensions with Ukraine, according to BCS analyst Andrei Smirnov: “Sanctions risks have increased, and high-profile incidents involving UAVs have become more frequent. The negotiation track, at least in the public sphere, has stalled.”

By all accounts, margin calls have begun in the market: due to losses, brokers were forced to close out investors’ positions, which pushed prices even lower, and among “second-tier” stocks, the decline reached double digits, Kogan notes: Ciana shares plummeted by 13.4%, Sollers by 14.7%, and Rusagro and TMK by more than 10%.

Since mid-March, when the market began to fall, the Moscow Exchange Index has lost 20%, and 30% relative to its 2024 peaks, when Vladimir Putin began negotiations with Donald Trump. “Only geopolitics can radically change the situation, since all other factors are merely a consequence of the sanctions and restrictions that have been imposed,” write analysts at Vector Capital.

You can support the website Charter97.org

MULTI-CURRENCY ACCOUNT FOR ASSISTANCE:

Bank's name: Bank Millennium S.A.
Address: ul. Stanislawa Zaryna, 2A, 02-593, Warszawa
IBAN: PL97116022020000000216711123
SWIFT: BIGBPLPW
Name of the account holder: Fundacja “KARTA ‘97”
Purpose/title of payment: Donation for statuary aims

You can contact us by the e-mail [email protected]