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Russian Stocks Down 3 Days in a Row
Global stock markets continued their descent on Thursday, responding to the drastic sell-off in China on Tuesday. Russian shares hit their record lows, shedding more than 3 percent in just one day. Experts argue that this kind of selling is only psychological and has no good grounds. However, money outflow from developing nations is likely to persist, which may cut the capitalization of the Russian market by a further $100 billion, analysts predict.
Stock indices around the world dropped roughly 1.5 percent on Tuesday. The RTS index closed down 3.3 percent.
In the morning Russian shares seems to be regaining some of their value. But a wide sell-off in Europe in the late afternoon sent Russian stocks plummeting again. Russia’s major Sberbank closed down 6 percent.
The Russian stock market slipped more than 8.8 percent in just three days, a loss similar to those on Chinese markets. Foreigners account for the major part of the e sell-off which is clear by high trading volume at the RTS on Thursday – $106 million.
Experts note that market fears have nothing to do with global trends as oil prices have recently cleared the psychological $60 per barrel. “The overall investment climate in Russia is still extremely favorable and the situation on raw materials markets is stable and there are no indicators for the recession of the global economic growth,” Svetlana le Gall, a portfolio manager at UFG Asset Management, told Kommersant. “The further decline of Russian shares has no sound grounds.”
However, recent developments have demonstrated that the Russian stock market is still extremely vulnerable. Analysts say that heavy selling in Russia is highly psychological, and investors are likely to keep overlooking fundamental economic factors. It will take a lot of time, which will probably cut the market by further 5 or 10 percent.
www.kommersant.com
All the Article in Russian as of Mar. 02, 2007
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