On the Russian market, sales are increasing. On Friday, February 28, the dollar exchange rate on the Moscow Exchange grew by 1.43 rubles. by the close of Thursday and reached 67.45 rubles. to 12.48 Moscow time. The euro exchange rate exceeded 74 rubles for the first time since August last year, and by one o’clock in the afternoon the European currency was already worth 74.48 rubles. (+ 1.94 rubles).
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The Mosbirzhi index fell by 5.14% by 13.03 Moscow time by Thursday’s close to 2765.92 points. The RTS dollar index fell 6.89% to 1290.7 points.
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On Friday, the price of Brent crude oil fell below $ 50 for the first time since July 2017, but by 1p.m. quotations corrected to $ 50.4 per barrel.
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Other stock markets also continue to suffer losses. Yesterday, the fall in the US S&P 500 index (-4.4%) and the pan-European Stoxx 600 index (-3.7%) turned out to be the most significant since 2011, says Ilya Pitersky, VTB Capital strategist in the review. On Friday morning, Asian markets also continued to decline: Shanghai Comp. lost 3.6%, Hang Seng – 2.8%. By Friday afternoon, the Stoxx 600 lost another 3.8%.
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Investors are increasingly worried that the coronavirus epidemic, spreading outside of China, will develop into a global pandemic, says Tatiana Evdokimova, chief analyst at Nordea Bank: “And if only China had reduced production and limited movement before, now other countries can follow its example. “where outbreaks of the virus are recorded, which can seriously affect the global economy.” All this beats the world supply chains and, accordingly, the real sector, one reduction in interest rates or pouring liquidity into the markets does not particularly improve the situation, warns Evdokimova. In particular, this is why the markets of developed countries, including the American one, are falling steadily, she explains: investors, worried about the future decline in company profits, are withdrawing from stocks and rushing into protective US government bonds and gold. In addition, the “overheating” of the markets affected that year, the analyst recalls.
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Emerging markets, as a rule, decline more strongly during periods of large-scale corrections, and, in addition, Russian assets are affected by a drop in oil prices, which balance at around $ 50 – the lowest level since late 2018 – and may go lower, in the range of $ 45-50 says financial analyst at BCS Premier Sergey Deineka. In his opinion, the “bearish” moods on the Russian stock market are also reinforced by the tense geopolitical background associated, in particular, with the situation in Syrian Idlib, where the Turkish military died last night due to an air strike.
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In addition, when quotes drop to a certain level, stop loss triggers for investors, and forced sales lead to another round of decline, says Vladimir Bragin, Director of Financial Markets and Macroeconomics at Alfa Capital. He fears that the release of the first macroeconomic data on the impact of the virus on the Chinese economy in March may push markets further down. “However, we must not forget that last year the stock markets grew significantly and a correction was expected, and the virus in these conditions became an occasion to reduce positions,” Bragin emphasizes. Given the accumulated risks in the global economy, a forced shake in the form of a virus may even be at hand, he is optimistic: companies will have to increase their efficiency, which may delay the global recession.
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