On Wednesday, the Moscow Exchange Index experienced a slight decline during the main trading session, with a 0.4% fall on low volumes. The day’s significant developments unfolded in the evening, marked by a mix of inflation data showing a weekly increase but an annual decrease. These indicators are generally viewed positively, raising hopes for potential monetary policy adjustments by the Bank of Russia if the trend of declining annual price growth continues.
However, the primary catalyst for the evening’s market downturn was geopolitical news concerning the composition of the Russian delegation for negotiations with Ukraine, led by Presidential aide Vladimir Medinsky. This announcement triggered a sharp market drop of 61 points as investors anticipated more prominent political figures to lead the talks.
Trading concluded at intraday lows, typically indicating a continuation of downward movement. Despite a 0.7% morning market uptick, the situation remains volatile, with the formation of a “converging triangle” on the Moscow Exchange Index signaling potential buying opportunities for risk-inclined investors near the 2800 mark.
Notably, shares of St. Petersburg Stock Exchange, AFK Sistema, NOVATEK, Aeroflot, and Aeroplane were among the top decliners, reflecting heightened sensitivity to possible sanctions and monetary policy shifts.
The ruble’s strength against the yuan, almost breaching the 11 mark, was disrupted by geopolitical developments impacting the yuan-ruble pair. Despite this, fundamental factors have hindered a significant ruble depreciation, with reduced foreign currency purchases by bank customers and exporters, influenced more by falling oil prices than reserve-building intentions.
Today’s foreign exchange market dynamics will be influenced by news from ongoing negotiations, which will shape trading sentiment. The Moscow Exchange Index’s movement hinges on the meeting’s outcomes and accompanying comments, with expectations of increased volatility in the market.
Alexey Antonov, Head of Investment Consulting at ALOR BROKER, underscores the importance of monitoring geopolitical developments and their impact on market trends, advising caution amid fluctuating conditions.
The “Comments” section of AK&M news agency provides insights from investment firms and banks, offering diverse perspectives on market conditions. These opinions, while informative, reflect specific viewpoints at the time of publication and do not constitute financial advice or recommendations for securities trading.
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