Moscow Exchange Index Falls 4.29% Due to Lavrov's Statements

On August 14, the Moscow Exchange Index dropped by 4.29% to 2136.3 points, marking the steepest decline since September 2022. In just one trading session, the market lost about 250 billion rubles. Over three days, the index fell by 8.4%, erasing half of the gains made in the previous month and a half. The decline accelerated following statements by Russian Foreign Minister Sergey Lavrov regarding the impossibility of freezing hostilities and potential harsh responses to Ukrainian attacks. The Russian Foreign Ministry rejected Ukraine's proposed ceasefire in the Black Sea. Analyst Natalia Milchakova noted that the escalation of geopolitical risks was the main factor behind the stock sell-off. In the evening, shares of major companies also fell: Sberbank -1.4%, Magnit -3.2%, Gazprom -4.4%, Lukoil -4.8%, Rosneft -5.1%, RUSAL -6.5%. Investors are closing positions that were previously opened in anticipation of improved relations with the U.S. Additional pressure on the market is being exerted by high key interest rates and weak economic growth. Analysts warn of the risk of increasing budget deficits due to strikes on infrastructure. If tensions persist, the index could drop to 1898 points.

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