Russian stock market goes into a coma, as Russian companies collapse on international stock exchanges
When Russia announced late last night that its stock market opening would be delayed by several hours today, we sarcastically asked if it would ever open again. Given that it never did open today (it’s now after 10pm in Moscow), we’re now half-wondering if our sarcastic prediction may end up actually happening. At this point it’s fair to say Russia has put its stock market into an induced coma to try to keep it from dying.
Meanwhile, with the Russian stock market still closed, major Russian companies that trade on other countries’ stock exchanges are getting wiped out. Anders Åslund, an economic expert on Russia, Ukraine, and Eastern Europe, noted that Russian companies including Sberbank and Gazprom lost more than half their value when the London Stock Exchange opened. Meanwhile, Russian oil company Rosneft is down more than 40%. This comes even as British oil giant BP has announced it’s selling its 20% share in Rosneft.
The Russian ruble is also plummeting, having been down anywhere from 25% to 40% throughout the day. If this trend holds, it’ll lead to massive inflation in Russia. We’re not talking about the pedestrian kind of inflation that’s caused recent upticks in consumer goods prices in the United States. We’re talking about Russia facing the kind of crushing inflation that causes things to be more expensive in the afternoon than they are in the morning, because the currency is collapsing just that quickly.
Notably, some major stock markets are holding fairly steady in the face of Russia’s economic collapse. The DJIA in the United States is only down about 1.5% today. And in spite of the collapse of the Russian companies on the London Stock Exchange, the FTSE closed nearly unchanged for the day.
