Micex Falls to Two-Week Low on Sanctions: Russia Reality Check

As markets react in real time to Russia’s incursion into Crimea and the annexation of the Black Sea peninsula, the Micex Index fell to a two-week low as some companies traded without the right to a dividend and concern grew that European leaders may decide on new sanctions tomorrow.

The gauge lost 0.5 percent to 1,475.77 in Moscow, paring its gain since Feb. 28, a day before President Vladimir Putin’s incursion, to 2.2 percent. The U.S. urged its European allies to support deeper sanctions against Russia as Ukraine peace talks struggled to inch forward. The European Union’s first opportunity to consider wider penalties on industry, investment or trade will be at tomorrow’s Council of Europe meeting.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. The ruble lost 0.1 percent to 34.3485 per dollar, trimming the advance since Feb. 28 to 4.5 percent. The yield on ruble bonds due February 2027 rose one basis point to 8.74 percent, extending the increase in the period to 38 basis points.

The top panel displays the value of the Micex Index of 50 Russian equities, government debt in the Bloomberg Russia Local Sovereign Bond Index, and the ruble relative to the dollar. Credit default swap rates on Russian bonds due in five years appear in the bottom panel. The yield gap between Russian debt and U.S. Treasuries and the one-month implied volatility of the ruble are also tracked.

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Chris Kirkham, Alex Nicholson

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