Russia’s stock markets is experiencing what many are describing as a bloodbath, at the start of the trading session on Thursday after Russian President, Vladimir Putin launched a special military operation on Ukraine.
The benchmark index, the MOEX index, which is the index comprising leading Russian shares, which opened Thursday’s trading session at 3,084.74 basis point, is currently trading at 1,681.55 basis points, representing a decline of approximately 45.50% as of the time of this writing, according to Bloomberg.
The crash came as investors are reacting to Western governments’ promised unprecedented sanctions in response to President Vladimir Putin’s shock announcement that Russia had launched military action against Ukraine.
What you should know
- The start of trading was temporarily delayed to allow Russia’s Central Bank announce an emergency support package, which is intended to intervene in the foreign currency markets and boost liquidity to banks.
- The apex bank in Russia said in a statement that, “To stabilize the situation on the financial market, the Bank of Russia decided to start interventions in the foreign exchange market and conduct operations today to provide additional liquidity to the banking sector.” The apex bank further said it stood poised to use “all necessary tools” to stave off the worst of the volatility.
- In a later update, it said it was blocking the short-selling of shares in a bid to halt the slide and “protect the interests of investors.” Trading was once again suspended at 10:40 following the unprecedented sell-off, the Moscow Exchange said in a statement.
- The resumption came amid reports that the Russian military has knocked out Ukraine’s air defence assets and airbases. AP reported Russian Defence Ministry stated that the Russian strikes have “suppressed air defence means of the Ukrainian military,” adding that the infrastructure of Ukraine’s military bases has been incapacitated.” It denied the claims that a Russian warplane was shot down over Ukraine.
- All sectors felt the sell-off. Russia’s banks and even giant commodities firms, metals exporters and technology companies all fell heavily in the mass sell-off.
- On the currency front, we are also seeing sell-offs. The Russian ruble declined by more than 10% at one point to stand above 100 against the euro and 90 against the U.S. dollar, both all-time lows.
The trading in Russian stocks did not take place on Wednesday on account of Defender of the Fatherland Day 2022. In a release, the exchange had said, “On February 23 and 8 March 2022, all securities not traded on that day will have their standard indicators – including closing price, admitted quote and market prices – calculated and disclosed in accordance with current methodologies.”
