Latest News

Russian Stocks’ 33% Crash Is Fifth-Worst in Market History

0
the close up of the five rows coins ,and the coins jar that fell, with the back ground is a dark blue graph.

(Bloomberg) — Russia’s rout on Thursday is the fifth-worst plunge in equity market history in local currency terms as investors sold the nation’s assets following the country’s invasion of Ukraine.

Most Read from Bloomberg

Russia Invasion of Ukraine Ignites European Security Crisis

Russia Hits Airfields; Kyiv Imposes Martial Law: Ukraine Update

Western Allies See Kyiv Falling Within Hours: Ukraine Update

Stocks Pare Slide as U.S. Announces More Sanctions: Markets Wrap

The $200 Billion Club Loses Last Member as Elon Musk’s Wealth Tumbles

The benchmark MOEX Russia Index closed 33% lower in Moscow, erasing $189 billion in shareholder wealth, as Western leaders vowed to step up penalties on Russia after military forces entered Ukraine. That’s the fifth most brutal one-day selloff among 90 global equity indexes analyzed by Bloomberg.

This is the first time since 1987 that a selloff of this magnitude has hit a market worth more than $50 billion. In the aftermath of the Black Monday crash that year, Hong Kong’s Hang Seng Index tumbled 33%. The worst single-day drop over the past century in any market of any size was Argentina’s 53% slump in January 1990, when the country was battling hyperinflation and a mounting economic crisis.

The drop in Russia’s benchmark matches that of Hong Kong’s Hang Seng Index during the aftermath of the Black Monday crash in 1987. When looking at markets of all sizes, the biggest single-day drop on record was Argentina’s 53% slump in January 1990, when the Latin American country was in the middle of an economic crisis and period of hyperinflation.

All calculations are based on local currencies.

To be sure, some of the world’s major indexes have circuit breakers that prevent them from falling beyond a certain level. For instance, the benchmark S&P 500 index has a so-called limit down level at 20%, after which trading would be closed for the day.

Russia became the world’s cheapest stock market this week as repeated negotiations to avert a military conflict failed, leaving investors fretting over geopolitical risks in addition to worries over inflation, Federal Reserve tightening and renewed regulatory curbs in China.

The MOEX gauge’s price-to-earnings ratio fell below 3 times projected profits after starting the year at 5.4 times.

(Updates prices with Russian market close.)

Most Read from Bloomberg Businessweek

A Pandemic Baby Bump Shines a Spotlight on the Nordic Welfare Model

Removing Resumes From Hiring Process Can Improve Diversity

Wall Street Is Buying Starter Homes to Quietly Become America’s Landlord

Elon Musk’s Boring Company Plots Texas Tunnels

The Abortion Pill Is Safer Than Tylenol and Almost Impossible to Get

(C)2022 Bloomberg L.P.

Paul Brandus: America gets a wakeup call as Putin menaces Europe

Previous article

Best Oversold Stocks to Buy for March 2022

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News