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Stock Market Jump a Technicality?
After an unrelenting seven-day slide, the Russian stock market made a notable recovery with the MICEX and RTS indexes climbing 5.15-5.8 percent, the biggest jump since June 2006. Traders have not broken out the champagne yet, however. They say the upturn is only a technical correction, and the worldwide slump will continue.
American markets turned around on Wednesday, closing up 2.5 percent after a number of insurance companies said they may lower the risk on some banking products. Their declarations were taken as a sign that U.S. government measures to pull the economy out of the ditch were kicking in. That set the tome for world markets. Asian markets gained 0.3-3 percent and European markets did even better. The British FTSE rose 4.75 percent, the French CAC gained 6.01 percent, and the German DAX 5.93 percent. Quotes on Russian exchanges rose 2.5 percent when the markets opened. The RTS index closed up 5.15 percent at 1988.23 points, and the MICEX index reached 1661.99 points, up 5.8 percent.
The Russian markets began their fall on January 15 and lost 18.65-19.18 percent in that time. Yesterday's increase reversed only the last two days of the fall. Traders say that most of the action on the market now is from speculators and that the price growth yesterday was indicative of the closure of short-term positions. Investors snapped up stock when the market began to fall and occupied short-term positions in hopes that the fall would continue. When the market began to rise, they had to sell off their shares to cut their losses.
Rising oil prices were also reflected on the market. WTI oil rose 1.9 percent, leading to a jump of 8.56 percent in LUKOIL stock, 6.15 percent for Rosneft and 7.86 percent for Surgutneftegaz on MICEX. Sberbank gained 6.63 percent and VTB rose 4.65 percent.
www.kommersant.com
All the Article in Russian as of Jan. 25, 2008
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