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Dipping below a Trillion
The capitalization of the Russian stock market fell below $1 trillion yesterday for the first time in two months. The RTS index rose 0.67 percent in the early hours of trading yesterday, before heading steadily downward for a loss of 1.2 percent. The index has lost 5.6 percent in the last three days and it has dropped below 1800 points for the first time since June 8. “The market is being driven not by its fundamental indicators, but by fear,” one broker said.
All blue chip stocks except Rostelekom and Gazprom tumbled. Gazprom has just announced that it would buy up 1 billion rubles' worth of its own stock (0.016 percent of the whole) this autumn. The company declined to say officially what it needed the stock for, but a source said that it may be used for the company management's option program.
Yesterday evening, the U.S. federal reserve Board announced that it was lowering the discount rate to 5.75 percent. That was taken well by world markets, and the RTS index pulled itself up 2.22 percent to the level of 1860.70. The MICEX index gained 2.4 percent to 1637.81 points. Surgutneftegaz, Rostelekom and Sberbank were the growth leaders.
Russian companies had a hard day in London as well. LUKOIL gained 0.84 percent on the LSE, compared to 2.05 percent on the MICEX. Norilsk Nickel GDR gained lost 0.38 percent in London, compared to a boost of 1.37 percent on the MICEX.
www.kommersant.com
All the Article in Russian as of Aug. 18, 2007
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