Micex Drops as Sistema Slides on Arrest: Russia Reality Check

Markets are reacting in real time to tension in Ukraine following Russia’s March incursion into Crimea and subsequent annexation of the Black Sea peninsula.

The Micex Index retreated 1.9 percent to 1,449.37, bringing its decline since Feb. 28, the day before President Vladimir Putin’s intervention, to 0.3 percent. OAO Sistema slumped 37 percent after billionaire Vladimir Evtushenkov was placed under house arrest. The ruble, which has tumbled 6.5 percent in the period, weakened 0.1 percent to 38.3840 per dollar by 7:15 p.m. in Moscow. The yield on local-currency bonds due February 2027 fell seven basis points to 9.59 percent, trimming its increase since the incursion to 123 basis points.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. The top panel displays the value of the Micex Index of 50 stocks, 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.

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