Russian markets drop sharply in seesaw trading
By NATALIYA VASILYEVA
Associated Press Business Writer
Oct 13, 1:15 PM EDT
MOSCOW (AP) -- Russian stock benchmarks dropped sharply Monday on declining world oil prices and new struggles for control of the world's largest nickel miner, prompting trading suspensions on the country's two exchanges.
The ruble-denominated MICEX index closed 4.8 percent down at 666.4 points in Monday's session, with a one-hour suspension after its technical index - the composite of all stocks - fell more than 5 percent.
Russian state-controlled companies led the MICEX decline: Oil major Lukoil shed 11 percent; the country's biggest lender, Sberbank, dropped 9.3 percent; and state-controlled oil giant Rosneft lost 8.7 percent, causing trading for the three blue chips to be halted less than one hour before the close. State-controlled gas export monopoly Gazprom was down 8.8 percent.
Russia's dollar-denominated exchange, the RTS, plummeted 6.3 percent to 791.2 points an hour before its 6 p.m. (1400GMT) regular closing time.
Few were surprised that this happened while European stock markets were rising strongly Monday, boosted by a strong opening on Wall Street.
The world financial crisis, Russia's war in August with Georgia, and plummeting commodity prices have helped make Russian markets among the world's worst-performing. The RTS, which saw its worst one-day loss on Oct. 6, is down more than 65 percent from its May high. The MICEX has lost 64 percent.
Russia's government has struggled to keep the world financial turmoil from wreaking havoc on the nation's banking sector and the wider economy.
Russia's upper house of Parliament on Monday approved an anti-crisis package that includes increasing deposit insurance for private bank accounts and authorizing the Central Bank to provide unsecured loans to banks. Officials have promised the adopted measures would be enforced by Wednesday.
Prime Minister Vladimir Putin said Monday the state-owned Vnesheconombank would receive $50 billion to refinance the debts of Russian companies. Russian corporations are estimated to have $45 billion due for repayment by year-end.
Vnesheconombank said it had received applications to refinance more than the $50 billion it has been given. It did not elaborate.
Russian stock exchanges were open Monday for the first time since regulators halted operations Thursday after a roller coaster week.
Sergey Karykhalin, chief analyst at Moscow-based investment bank Kapital, said Russia's market was reacting to declining oil prices, which hovered at $80 a barrel Monday. Russia supplies one-third of the European Union's oil and 40 percent of its natural gas.
Investors also were watching aluminum giant Rusal's call for an extraordinary meeting of the board of directors at Norilsk Nickel, the world's largest nickel miner, Karykhalin said. The company is the subject of an ongoing tug-of-war among some of Russia's wealthiest men and the corporations they control.
"Overall the upward movement on Asian and European markets has kept Russian (stocks) from plunging even deeper," he said.
MICEX opened with lofty gains initially on the anticipation that the government would start buying stocks after Putin announced government plans to buy domestic stocks this week.
Karykhalin noted that state-owned blue chips were the biggest gainers on the MICEX. He said the government will want to buy stocks on the MICEX but will try to do it quietly to avoid speculators pumping up prices.
Andrei Kilin, portfolio manager at Troika Dialog, said that Monday's trading volumes were not large enough to indicate state intervention.
"This purchase is not evident," he said. "Until the market sees strong buying, hardly anyone will be purchasing in anticipation."
"Cash-stripped speculators have no financial resources to play on the market rebound," Kilin said.
Government assurances and pledges of financial aid have failed to restore investor confidence, he added.
"The market has absolutely no trust in anything or anyone. People want to get away from this market."
http://hosted.ap.org/dynamic/stories/E/EU_RUSSIA_MARKETS?SITE=RIPRJ&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-10-13-13-15-48
Solar Stocks #board-11148
Peak Oil #board-6609
Coal #board-2809
Real Estate Bubble #board-7285
Lender Implosion #board-10076
HomeBuilders #board-1680
Your Economy #board-1948
Global Warming #board-11877
By NATALIYA VASILYEVA
Associated Press Business Writer
Oct 13, 1:15 PM EDT
MOSCOW (AP) -- Russian stock benchmarks dropped sharply Monday on declining world oil prices and new struggles for control of the world's largest nickel miner, prompting trading suspensions on the country's two exchanges.
The ruble-denominated MICEX index closed 4.8 percent down at 666.4 points in Monday's session, with a one-hour suspension after its technical index - the composite of all stocks - fell more than 5 percent.
Russian state-controlled companies led the MICEX decline: Oil major Lukoil shed 11 percent; the country's biggest lender, Sberbank, dropped 9.3 percent; and state-controlled oil giant Rosneft lost 8.7 percent, causing trading for the three blue chips to be halted less than one hour before the close. State-controlled gas export monopoly Gazprom was down 8.8 percent.
Russia's dollar-denominated exchange, the RTS, plummeted 6.3 percent to 791.2 points an hour before its 6 p.m. (1400GMT) regular closing time.
Few were surprised that this happened while European stock markets were rising strongly Monday, boosted by a strong opening on Wall Street.
The world financial crisis, Russia's war in August with Georgia, and plummeting commodity prices have helped make Russian markets among the world's worst-performing. The RTS, which saw its worst one-day loss on Oct. 6, is down more than 65 percent from its May high. The MICEX has lost 64 percent.
Russia's government has struggled to keep the world financial turmoil from wreaking havoc on the nation's banking sector and the wider economy.
Russia's upper house of Parliament on Monday approved an anti-crisis package that includes increasing deposit insurance for private bank accounts and authorizing the Central Bank to provide unsecured loans to banks. Officials have promised the adopted measures would be enforced by Wednesday.
Prime Minister Vladimir Putin said Monday the state-owned Vnesheconombank would receive $50 billion to refinance the debts of Russian companies. Russian corporations are estimated to have $45 billion due for repayment by year-end.
Vnesheconombank said it had received applications to refinance more than the $50 billion it has been given. It did not elaborate.
Russian stock exchanges were open Monday for the first time since regulators halted operations Thursday after a roller coaster week.
Sergey Karykhalin, chief analyst at Moscow-based investment bank Kapital, said Russia's market was reacting to declining oil prices, which hovered at $80 a barrel Monday. Russia supplies one-third of the European Union's oil and 40 percent of its natural gas.
Investors also were watching aluminum giant Rusal's call for an extraordinary meeting of the board of directors at Norilsk Nickel, the world's largest nickel miner, Karykhalin said. The company is the subject of an ongoing tug-of-war among some of Russia's wealthiest men and the corporations they control.
"Overall the upward movement on Asian and European markets has kept Russian (stocks) from plunging even deeper," he said.
MICEX opened with lofty gains initially on the anticipation that the government would start buying stocks after Putin announced government plans to buy domestic stocks this week.
Karykhalin noted that state-owned blue chips were the biggest gainers on the MICEX. He said the government will want to buy stocks on the MICEX but will try to do it quietly to avoid speculators pumping up prices.
Andrei Kilin, portfolio manager at Troika Dialog, said that Monday's trading volumes were not large enough to indicate state intervention.
"This purchase is not evident," he said. "Until the market sees strong buying, hardly anyone will be purchasing in anticipation."
"Cash-stripped speculators have no financial resources to play on the market rebound," Kilin said.
Government assurances and pledges of financial aid have failed to restore investor confidence, he added.
"The market has absolutely no trust in anything or anyone. People want to get away from this market."
http://hosted.ap.org/dynamic/stories/E/EU_RUSSIA_MARKETS?SITE=RIPRJ&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-10-13-13-15-48
Solar Stocks #board-11148
Peak Oil #board-6609
Coal #board-2809
Real Estate Bubble #board-7285
Lender Implosion #board-10076
HomeBuilders #board-1680
Your Economy #board-1948
Global Warming #board-11877
Solar Stocks #board-11148
Peak Oil #board-6609
Coal #board-2809
Real Estate Bubble #board-7285
Lender Implosion #board-10076
HomeBuilders #board-1680
Your Economy #board-1948
Global Warming #board-11877
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