Support The Moscow Times!

Russian Stocks Hit 5-Week Lows as Europe Mulls New Sanctions

Both the ruble-denominated MICEX and the dollar-denominated RTS indices fought back from deeper losses to end the day down 0.3 and 0.2, respectively.

Fear of new economic sanctions pushed Russian equities to new five-week lows on Wednesday, as the U.S. ramped up pressure on EU leaders meeting to impose new sanctions on the Russian economy and violence continued in Ukraine.

Russian shares fell for the third straight session, though both the ruble-denominated MICEX and the dollar-denominated RTS indices fought back from deeper losses to declines of 0.3 and 0.2, respectively, at 7 p.m. in Moscow..

EU leaders will work to block loans for new projects in Russia by two multilateral lenders, the European Bank for Reconstruction and Redevelopment and the European Investment Bank, as well as broadening the scope of other sanctions, according to a draft statement from the meeting.

"Fears of new sanctions have resurfaced in recent days. What could happen if Russia manages to avoid meaningful sanctions is that the U.S. could go for unilateral sanctions," said Tatyana Orlova, a strategist at RBS.

"But if no biting sanctions materialize in the next few days [U.S. and European] lawmakers will go on recess and the sanctions talk will die down."

The ruble weakened slightly against the euro and gained slightly against the dollar on Wednesday.

Orlova played down the impact of the withdrawal of EBRD and EIB assistance, adding: "It is harsh language but so far I have not seen anything that could do much damage."

The sanctions threat did not prevent Russia's Promsvyazbank from selling $300 million in bonds on Tuesday at 10.5 percent, $100 million more than targeted. It is the first Russian issuer to sell dollar bonds since the crisis with Ukraine began.

The conflict has also been hitting Ukraine's economy, forcing the Central Bank to jack up rates by 300 basis points to 12.5 percent. The hryvna fell 0.6 percent to a one-week low.

Material from the Moscow Times was included in this report.

See also:

EU Leaders Meet to Discuss Sanctions Expansions Over Ukraine

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more