Until the very end, not believing in the use of force in Ukraine and retaining the hope that Vladimir Putin's strategy was just a diplomatic bluff, the Russian stock market ended up with a broken trough, writes publication finanz.ru.
After the announcement by Russian President Vladimir Putin of the decision to recognize the independence of ORDLO Ukraine, the top 5 "blue chips" of the Russian market fell in total by almost 4 trillion rubles (50 billion US dollars).
The largest drop was demonstrated by the shares of Sberbank, which fell by 24% during the trading session, repeating the record of the blackest day of the 2008 global crisis. The capitalization of the bank, which is threatened with sanctions in the form of a ban on dollar settlements, has decreased by a trillion rubles per day.
More than a trillion rubles were lost by investors in the papers of Rosneft. They collapsed by 19.8% - also a record since November 2008. Papers of VTB and Lukoil, Gazprom and other companies collapsed.
“There is panic in the stock market. Non-residents flee. For many, stop losses began to work, which only exacerbates the fall. The mass of private investors who entered the market in the last couple of years for high income will soon begin to leave,” notes Alexey Antonov, Chief Analyst of Alor Broker.
The fall may continue and amount to 50%, everything will depend on the severity of Western sanctions.
Earlier today, European Commission President Ursula von der Leyen stated that the new EU sanctions could cut the budget of the Russian Federation by half. She has already reacted to what happened, saying that EU countries will immediately respond with tough sanctions. This is stated in a joint statement by the Presidents of the European Commission and the European Council, Ursula von der Leyen and Charles Michel, released on Monday in Brussels.
“Chairman Michel and Chairman von der Leyen condemn in the strongest possible terms the decision of the President of Russia to proceed with the recognition of non-government-controlled areas of Donetsk and Luhansk regions of Ukraine as independent entities. This move is a flagrant violation of international law, as well as the Minsk agreements. The Union will respond with sanctions against those involved in this illegal act,” the statement reads.