Russian investors look to U.S. to sort out its financial turmoil
The United States may be the epicentre of the financial turmoil, but it's also where other economies are looking to lead the way out of the crisis. Experts in Russia agree the benchmark Dow Jones industrial average is the best indicator of where the Russi
Russian market players are glued to their computers, with the U.S. Senate set to vote Wednesday night on a $700 billion financial-rescue plan.
Despite the State's willingness to pour billions of dollars into the system to boost liquidity, volatile US markets spell bad news for Russia's indices according to Finance Minister, Alexei Kudrin .
“We do expect that that the Dow Jones will either remain the same or, what's more likely, continue losing value. Nobody can predict how deep it will fall, but, it means our indexes will follow in its footsteps.”
Some experts, including Chris Weafer of Uralsib bank, say unless the US lawmakers push through the much-anticipated rescue plan, a global meltdown is inevitable:
“Even though the markets globally are falling everywhere, there is still an assumption that the U.S. will treat the deal and will get it passed. Because if they don't we simply are looking at total global meltdown. Because that extreme fear is there, then people don't believe that we'll actually get it.”
Concerns over global growth may also have an unexpected consequence for the Russian markets. According to the head of the Federal Financial Markets Service Vladimir Milovidov, the consolidation of the main RTS index and the MICEX currency exchange would benefit market players.