General director of the Moscow International Currency Exchange (MICEX) Alexey Rybnikov
Photo: Vasily Shaposhnikov
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Western Markets Drag Russia's Down
The Russian stock experienced the sharpest fall in the last year yesterday. The MICEX index lost 4.29 percent, to 1839 points, and the RTS 4.41 percent, to 2225 points. The wave of sales on markets in the United States, Europe and Asia undermined the quotes on almost all Russian companies. The U.S. mortgage crisis has extended to sectors and investors are pulling their money off of stock markets in expectation of a decline in the world economy and lower profits for leading corporations.
The U.S. government has published data on retail sale in December showing that they decline by 0.4 percent in comparison with November. That led to mass sales of stock in export-oriented companies. Citibank, the world's largest, has announced net losses of $9.83 billion in the last quarter of last year. The is in comparison with a net profit of $5.12 billion in the same period of 2006.
After former U.S. Federal Reserve chairman Alan Greenspan fined the flames further in anew interview, European markets fell 2-3 percent, U.S. markets fell 2 percent and Asian markets dropped 2.8-3.25 percent. The Russian market did not have time to react when the news was announced on Tuesday, so the Russian market was hit a day later, suffering the fourth largest plunge in its history. The Russian market had been stable this year until then, in spite of the continuing bad news from abroad.
Almost all Russian stocks were affected. Gazprom lost 6 percent on the RTS. LUKOIL lost 7 percent and Sberbank 4.29 percent. Vneshtorgbank lost 3.7 percent on MICEX, although KamAZ gained 7 percent after the publication of a positive economic report. Trading on Western markets was clam yesterday after the panicky sell-off. European markets lost 1 percent and American markets were down 1 percent at midday.
www.kommersant.com
All the Article in Russian as of Jan. 17, 2008
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