Russian stocks drop as many countries expel Russian diplomats

MOSCOW, Mar 26 (PRIME) -- Stocks fell on Monday after several countries, including some E.U. states and the U.S., expelled Russian diplomats due to Moscow’s alleged involvement in poisoning of former spy Sergei Skripal in the U.K., analysts said.

The MOEX Russia Index fell 1.96% to 2,240.85 and the RTS decreased 2.42% to 1,230.96.

“The negative character of the current trade was formed already at the market opening. Continuous worsening of the geopolitical background was against Russian bulls,” Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said.

“In addition to that, the U.K. announced a decision to issue arrest warrants for Russian capital of questionable provenance. Thus, the increase of geopolitical pressure may lead to an economic component that is very painful for the stock market.”

Improvement in the external background was of no help for local stocks. The European indices were in the green zone for the major part of the day, the Brent oil price stayed above U.S. $70 per barrel, and the ruble was strong against the U.S. dollar, Yevgeniya Abramovich, head of the currency risks analysis department at Swiss brokerage house Dukascopy Bank S.A, said.

“Still, the high oil price and strengthening of the ruble provided no support to the Russian shares,” Abramovich said.

Andrei Kochetkov, an analyst at Otkritie Broker, said that the strong ruble hurt Russian exporters. Gas giant Gazprom lost 2.63% to 255 rubles, metals giant Norilsk Nickel fell 2.25% to 10,750 rubles, and steelmakers Severstal and Novolipetsk Steel (NLMK) decreased 1.67% to 867.30 rubles and 1.47% to 146.35 rubles, respectively.

Federal Grid Company of Unified Energy System (FGC UES) outperformed the market and lost only 0.77% to 0.17415 rubles after a representative of the company said that dividends for 2017 will remain at least flat on the year, Kochetkov said.

Below are the MOEX Russia Index’ five most active stocks on Monday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-2.67	255.00	14.801
Gazprom	-2.63	138.27	3.869
Lukoil	-1.92	3800.00	2.458
Magnit	-0.67	4175.00	2.044
VTB	-4.30	0.05099	1.725

(57.1072 rubles – U.S. $1)

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