Russian Stock Market Opens Mixed as RTS and MOEX Indices Decline

The Russian stock market faces challenges amid Western sanctions, global commodity volatility, and tech earnings reports. Investors monitor alumina and aluminum market shifts as key factors influencing market trends.

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Trim Correspondents
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Russian Stock Market Opens Mixed as RTS and MOEX Indices Decline

Russian Stock Market Opens Mixed as RTS and MOEX Indices Decline

The Russian stock market opened with mixed dynamics on Monday, April 22, 2024, as the RTS and MOEX indices declined amid falling commodity prices, mixed global market signals, and increased Western sanctions pressure on Russia.

The dollar-denominated RTS index fell 0.03% to 1,173.32, while the ruble-based MOEX Russian index was flat at 3,470.76.

Despite the overall market decline, shares of Sistema, a major Russian conglomerate, rose on Monday. The Russian ruble was mostly unchanged against the U.S. dollar and euro. Brent crude oil, a global benchmark for Russia's main export, fell 1.5% to $85.98 per barrel.

Investors scaled back safe-haven bets as worries over a wider Middle East conflict eased, boosting world equities and pressuring gold, oil, and bond prices. The decline in gold prices, which had been fueled by U.S. investors hedging inflation and mounting geopolitical risks, particularly in the Middle East, interrupted a rally that had propelled the price of gold more than 20% higher since the middle of February.

The Russian stock market is facing a challenging environment due to a combination of factors, including the ongoing impact of Western sanctions and the volatility in global commodity markets. Despite sanctions, Russia has maintained its oil trade with India, exporting 4.91 million barrels per day. Russia remains India's top oil supplier, followed by Saudi Arabia and Iraq.

The alumina market is expected to be supported in the second quarter by lower output due to ongoing refinery cuts, while the latest sanctions by the US and UK on Russian aluminum are likely to cause potential trade flow disruptions. Spot liquidity in the global alumina market remains robust, with Australian alumina continuing to dominate the trade volumes.

The Russian central bank reported that Russian banks' profits fell marginally in March to 270 billion roubles ($2.89 billion), slightly lower than the month before. The Russian benchmark stock index strengthened to its highest point since the day Russia sent its troops into Ukraine in February 2022, while the rouble remained stable.

European stock markets also declined for the third consecutive week due to the ongoing conflict in the Middle East and a hawkish stance from the Federal Reserve, prompting investors to seek haven assets like gold. However, the Israel-Iran tension seems to be easing, and equity markets saw a rebound in Asia and Europe.

This week, investors' attention will shift to leading tech company earnings results from Europe and the US, as well as the release of flash manufacturing and services PMIs for major global economies, which are viewed as leading indicators of economic health. The most influential economic data will be the Eurozone's April manufacturing and services PMIs, which are expected to show a positive economic recovery trend.

Why this matters: The mixed performance of the Russian stock market amid global economic challenges and geopolitical tensions highlights the ongoing impact of Western sanctions on Russia's economy. The developments in the global alumina and aluminum markets, as well as the earnings reports from major tech companies, will likely influence investor sentiment and market trends in the coming weeks ahead.

The decline in the Russian stock indices on Monday was attributed to falling commodity prices, mixed global market signals, and increased Western sanctions pressure on Russia. The dollar-to-ruble exchange rate increased by 0.13% to 93.27 rubles, the euro-to-ruble rate rose by 0.06% to 99.45 rubles, and the yuan-to-ruble rate went up by 0.09% to 12.851 rubles. Market participants are closely monitoring the planned curtailment of the Kwinana Alumina Refinery in Western Australia and the potential restart of curtailed aluminium smelting capacity in Yunnan, southern China, as these developments could significantly impact the supply and demand dynamics in the global alumina and aluminium markets.

Key Takeaways

  • Russian stock market declined amid falling commodity prices and Western sanctions
  • Russia maintains oil trade with India, exporting 4.91 million barrels per day
  • The Alumina market is expected to be supported by lower output due to refinery cuts
  • Russian banks' profits fell marginally in March to 270 billion rubles
  • Investors focus on tech earnings, manufacturing, and services PMIs this week