US sanctions take bite out of Russian stocks & ruble

US sanctions take bite out of Russian stocks & ruble
Russian currency and stocks on the Moscow Exchange dropped significantly on Monday after Washington expanded the sanctions list against Russian businessmen and companies.

The ruble-traded MICEX index fell 8.5 percent, while the dollar-denominated RTS index suffered a 11.5 percent loss in value as of 16:21 MSK, dropping to the lowest level since September last year.

The ruble also plunged against the major currencies, depreciating over 3 percent against the dollar and the euro. The Russian currency was trading at almost 60 against the greenback and more than 74.5 against the euro, the worst result against the European common currency since September 2016.

“The sell-off on the Russian market has been very emotional. Until the market digests the negative information, the pressure on all stocks will be preserved,” InstaForex analyst Igor Kovalev said in a letter to RT.

“The sentiments on the local market will be determined by the behavior of non-residents who previously willingly bought Russian securities. If they continue withdrawing capital from Russian assets, the ruble may fall under even greater pressure,” said TeleTrade forex analyst Aleksandr Egorov.

The absolute loser on Monday was RUSAL, the world's second largest aluminum company by primary production, which was losing about 42 percent of its value in Hong Kong. The company’s former president, Oleg Deripaska, was sanctioned by Washington on Friday along with other Russian businessmen.

“The company’s initial assessment is that it is highly likely that the impact may be materially adverse to the business and prospects of the group,” the company said in a filing to the Hong Kong bourse on Monday.

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