Collapse again

"It's more like panic"

The ongoing correction in the stock market caused Russian stock prices to fall by 3-8% yesterday. At the end of the day, the RTS Index fell by 3.29% - from 1858 to 1797 points. Analysts and traders admit that they did not expect such panic from investors yesterday, and now they fear that the market decline will be more significant than they previously expected.

“In the morning, nothing foreshadowed a market collapse,” says Renaissance Capital analyst Avanes Aganesyan. -- Trading began with a slight increase in quotes, but by mid-day a massive sale of shares began. It was like panic."

All blue chips suffered from the actions of investors - shares of RAO UES of Russia fell by 2.81%, shares of Gazprom fell by 3.57%, the leaders of the fall were shares of Norilsk Nickel and Sberbank - their quotes decreased by 6.67 and 6.08%, respectively. Financial advisor at BrokerCreditService Investment Company Alexander Pimenov explains such a strong fall in Sber shares by the fact that previously these securities were traded against the market - on Wednesday their quotes rose by 2.7%. “The growth was driven by the hope that the market would quickly strengthen,” notes Mr. Pimenov. -- However, on Thursday the fall on world stock exchanges continued. The unfulfilled hopes of Sberbank investors led to an increase in sales.”

“I don’t see any fundamental reasons for such a decline,” continues Mr. Aganesyan. -- Massive sales can most likely be explained by psychological factors: investors fear that the correction in world markets will last a very long time. In addition, speculation around a possible war in Iran is aggravating the situation, which leads to a weakening of stock indices in developed countries.” In fact, panic in Russia began immediately after information appeared that European markets had sunk; aggressive sales intensified even after futures for American indices also went negative. And indeed, immediately after the opening of trading in the US, the Dow Jones index fell by 1.7%.

“If many explained the fall of the previous few days solely as a technical correction after the Chinese events, then on Thursday it became absolutely clear that this was not a rebound at all, but a repetition of the powerful market fall in May-June last year,” notes senior analyst at the Bank of Moscow Dmitry Skvortsov . “Indeed, it seems that we are talking about a repeat of the May collapse,” agrees Mr. Aganesyan. As you know, the Russian market, due to very strong previous speculative growth, fell by more than 20% in May last year.

Now, over these few days, Russian stock quotes have already dropped by 10% on average, and they may fall in price by the same amount in the near future, Mr. Aganesyan believes.

The head of the Federal Financial Markets Service Oleg Vyugin, who expressed his attitude to what is happening in an interview with the Vesti-24 TV channel, also agrees that the market will remain very unstable. “This is a reason to rethink the risks in a market that has been growing for quite a long time, so most likely we will not be dealing with serious growth, but we will be dealing with a volatile market,” he said. At the same time, Mr. Vyugin hopes that domestic shares have a sufficiently large margin of safety, and “if external investors behave cautiously, then domestic investors, who know the situation in Russia better, will be prudent and are unlikely to make sudden movements.” .

Natalia ROMANOVA