Russian Stock Market Falls to 1,250 Points Amid Correction

Strategic Insights -

The Russian stock market experienced a significant fall on Tuesday, with the benchmark RTS index dropping 1.83% to 1253.58 and the MICEX index falling 2.22% to 1124.79. The decline was led by Sberbank, which lost 6% to 43,100 rubles a share on the MICEX and 6.8% to $1,500 a share on the RTS. However, Lukoil was a notable exception, growing 0.4% to 2,048 rubles on the MICEX and 1.5% to $73.1 a share on the RTS.

Key Takeaways:

  • The Russian stock market fell to 1,250 points on the benchmark RTS index on Tuesday, led by Sberbank's 6% decline to 43,100 rubles a share on the MICEX and 6.8% drop to $1,500 a share on the RTS.
  • Lukoil was the only major stock to gain ground, rising 0.4% to 2,048 rubles on the MICEX and 1.5% to $73.1 a share on the RTS, likely due to its strong financial report for the first nine months of 2005 and news of new acquisitions and field openings.
  • Dealers attributed the correction to technical factors, with the market having grown significantly since the start of the year and speculators taking profit ahead of potential further growth fueled by good trends for world oil prices and buys for Russian ADRs in the West.
  • Experts predicted a possible drop to 1,200 points, but also suggested that highs would be reached again this year, with the level of 1,250 points on the RTS index considered acceptable for consolidation.
  • Sberbank's and Transneft's drop was indicative of the recent growth leaders paying for their previous outperformance, while the surplus of money on the market might prevent a deeper correction.
  • International Ratings Agency Standard & Poor's raised its ratings for Gazprom and Sibneft, but this had a limited impact on their stock prices, with Gazprom falling 4.5% to $8.11 a share on the RTS and Sibneft losing 1% to 116.9 rubles a share on the MICEX.

Statistics:

  • The RTS index fell 1.83% to 1253.58 and the MICEX index fell 2.22% to 1124.79.
  • Sberbank lost 6% to 43,100 rubles a share on the MICEX and 6.8% to $1,500 a share on the RTS.
  • Lukoil grew 0.4% to 2,048 rubles on the MICEX and 1.5% to $73.1 a share on the RTS.
  • Gazprom fell 4.5% to $8.11 a share on the RTS and 4.6% to 229.85 rubles a share on the St. Petersburg Stock Exchange.
  • Sibneft dropped 1% to 116.9 rubles a share on the MICEX and 1.7% to $4.1 on the RTS.
  • Transneft preferreds fell 4.9% to $2,600 a share on the RTS and 5.5% to 73,600 rubles a share on the MICEX.
  • RTS classic market trading was $91.975 million, with $36.948 million in trading volume for Gazprom.
  • Trading volume on the MICEX stock section exceeded 30.555 billion rubles, with 12.6 billion rubles in trading volume for Lukoil.

Sources:

  • Interfax, Jan 17
  • RTS stock market index
  • MICEX stock market index
  • Sberbank (RTS: SBER)
  • Lukoil (RTS: LKOH)
  • Gazprom (RTS: GAZP)
  • Sibneft (RTS: SIBN)
  • Unified Energy System (UES)
  • Rostelecom
  • Surgutneftegas
  • Norilsk Nickel
  • Tatneft
  • Mosenergo
  • Antanta Capital
  • Alexander Pankov
  • Yevgeny Volkov
  • MDM Bank
  • Megatrustoil
  • Alexander Razuvayev
  • Standard & Poor's
  • International Ratings Agency