Russian Stocks Plunge

The Russian stock market is plunging as the Trump administration announced new sanctions. Check out the price action in the Russian ETF (RSX).

From Bloomberg:

Russian stocks had their biggest drop in four years and the ruble slumped the most in the world after the U.S. slapped new sanctions on Kremlin-connected billionaires and tensions with the U.S. spiraled following the latest chemical attack in Syria.

The benchmark MOEX Russia Index sank 8.7 percent on Monday, the steepest slide since March 2014, when Moscow’s annexation of the Crimean peninsula triggered international penalties. The ruble and local bonds had their biggest drop since 2016 and the cost of insuring sovereign notes against default was set for the sharpest increase since December 2014.

Investors pulled out after the U.S. on Friday escalated penalties against Russia for meddling in the 2016 election by sanctioning dozens of Russian tycoons, companies and key allies of President Vladimir Putin. On top of that, U.S. President Donald Trump warned of a “big price to pay” in response to reports of a chemical attack outside Syria’s capital, saying President Vladimir Putin and Iran “are responsible for backing Animal Assad.”

“We haven’t seen such a united, mass retreat from Russian assets for a long time,” Kirill Tremasov, director of the analysis department at Loko-Invest said by phone. “The situation is ever more reminiscent of 2014.”

Posted by on April 9th, 2018 at 10:25 am


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