Source AP ©

Russian stock markets extend their losses

Russia's stock markets extended their losses Tuesday on the back of a dismal trading session in the United States as the Standard & Poors ratings agency revised its long-term outlook on seven Russian banks over liquidity concerns.

The MICEX, the largest Russian index, dropped 5 percent to 1,050.5 points as of 1.50 p.m. (0950 GMT), while the dollar-denominated RTS shed 3.5 percent to fall to 1,263.6 points. The market fall came despite government efforts to inject money into the financial system and buy shares in some companies.

As oil spiked to a recent high of US$120.9 per barrel, some U.S. politicians criticized their government's massive US$700 billion rescue plan for banks. Concerns over the dissent drove the U.S. S&P 500 index down by nearly 4 percent.

Shares also fared badly in Asia.

"The contagion will be felt in all global markets again today," wrote analysts from UralSib in a note to investors. "Investors in Russia will not escape the hangover effect today, albeit with the added complication of confusing moves in the oil price."

Russia is the world's second-largest oil producer after Saudi Arabia, and the No. 1 natural gas producer. During Vladimir Putin's eight-year presidency, many Russians benefited from the boom in world oil prices and stronger growth in the country's oil-fueled economy.

The falling stocks coincided with an announcement from Standard & Poor's ratings agency, which said Tuesday it had revised the long-term outlook on seven Russian banks - including billionaire Oleg Deripaska's Soyuz Bank - to stable from positive. The ratings agency cited concerns over their liquidity situation and their ability to refinance and attract loans.

Russia's MICEX index plunged 25 percent in just three days last week after the most turbulent trading period seen in a decade. The fall was triggered by a falling oil price and a wave of margin calls, which prompted forced selling.

Comments
The Amazon and the New Conquistadores
The Amazon and the New Conquistadores
Russians lose faith in their future, get ready for worse
Without INF Treaty, USA can destroy Russian nuclear weapons easily
Malaysia complains of faulty Russian Sukhoi Su-30 fighter jets
Without INF Treaty, USA can destroy Russian nuclear weapons easily
USA plays to pretend a mighty dragon that can no longer breathe fire
USA plays to pretend a mighty dragon that can no longer breathe fire
Putin sees no drama if Russia misses Davos forum
Macron challenges Trump. French independence and croissants at stake
Putin's three days in Singapore mark Russia's major geopolitical changes since 2000
Putin's three days in Singapore mark Russia's major geopolitical changes since 2000
Moving inexorably towards war
Putin dislikes the idea of US army bases coming to Kuril Islands
Putin dislikes the idea of US army bases coming to Kuril Islands
Putin sees no drama if Russia misses Davos forum
How can Americans and Russians understand each other?
How can Americans and Russians understand each other?
How can Americans and Russians understand each other?
Brexit: The UK's misunderstanding of Democracy
Russian FM Lavrov warns of possible war between Russia and USA