Russia moves to halt stock market selloff as trading resumes

Authorities step in with support measures as equities partially reopen after record shutdown over invasion of Ukraine. “The one fundamental factor that has improved during the stock market’s suspension is the partial recovery in the currency as Russia tries to shift oil and gas trade to rubles.” Since the local market last traded on Feb. 25, the U.S. and Europe have imposed harsh penalties on Russia in response to its invasion of Ukraine — hitting everything from its ability to access foreign reserves to the SWIFT bank-messaging system. “New money will be looking for opportunities to buy Russia’s oversold equities, so overall we might end up in a net positive situation rather than a net negative until non-residents will be allowed to sell their remaining stakes.” On the day of Russia’s invasion of Ukraine on Feb. 24, the benchmark MOEX Russia Index slumped as much as 45%, the fifth-worst plunge in equity market history. The White House slammed the partial resumption of Russian equities trading, calling it a “Potemkin market opening.” “Russia has made clear they are going to pour government resources into artificially propping up the shares of companies that are trading,” the statement said. “This is not a real market and not a sustainable model—which only underscores Russia’s isolation from the global financial system.” Still, Lutsko said local investors could flock to Russian equities as a hedge against inflation, which has surged near levels unseen since the government’s debt default in 1998.