Russian stock market witnessed heavy selloff on Thursday after President Vladimir Putin announced an attack on Ukraine and Russian forces fired missiles at several cities. Following the development, RTS Index (RTSI) declined 50 per cent to 611. The index breaks its Covid low of around 830-mark, scaled in March 2020.
RTSI is a free-float capitalisation-weighted index of 50 Russian stocks traded on the Moscow Exchange, calculated in US dollars. MOEX Russia index also declined more than 25 per cent to below 2,300, the lowest level since March 2020. MOEX Russia Index, formerly MICEX Index, is the main ruble-denominated benchmark of the Russian stock market.
Putin said that Russia has decided to launch a special military action in Ukraine and clashes between Russian and Ukrainian forces are “inevitable”. He asked Ukrainian service members to ‘lay down their arms and go home'.
Meanwhile, all Asian markets also traded in the red on Thursday. Hang Seng, Nikkei and Shanghai were down up 3 per cent. Back home, the benchmark equity index BSE Sensex crashed 2,000 points in the morning trade on Thursday. The NSE Nifty index was also down over 550 points.
Amar Ambani, head of institutional equities, YES Securities said, “The geopolitical event has been causing a rout across equity markets, as the world can ill-afford further disruption in trade and commodities when Covid has already weakened sovereign balance sheets.”
Ukraine has declared a state of emergency and Moscow has begun evacuating its Kyiv embassy. Meanwhile, a Pentagon official said 80 per cent of Russian forces amassed on the Ukraine border are ready to go and said Putin has assembled enough military assets to conduct a large-scale invasion.
The US markets on Wednesday ended deeply in red, extending the sell-off seen over the three previous sessions. Dow Jones Industrial Average fell 464.85 points, or 1.38 per cent, to 33,131.76, Nasdaq lost 344.03 points, or 2.57 per cent, to 13,037.49 and S&P 500 was down by 79.26 points or 1.84 per cent to 4,225.5.