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The Russian stock market is growing despite another package of sanctions



Despite the announcement of new sanctions by Washington, which affected the debt market, Russian assets are growing in trading on Friday. Moreover, if the Moscow Exchange index rises within 0.2%, then the RTS adds almost 1%, winning back the strengthening of the ruble, which is trading at fresh April highs in tandem with the dollar. What is the reason for such a reaction to the announced sanctions? The fact is that investors feared that the restrictions would be much tougher and would affect the secondary OFZ market. But this did not happen – Biden signed a decree prohibiting American financial institutions from participating in the purchase of Russian bonds on the primary market. In particular, we are talking about bonds issued after June 14, 2021 by the Bank of Russia, the National Wealth Fund or the Russian Ministry of Finance. Another reason why the new sanctions did not lead to a collapse of our market is that over the past year the share of American investors in the Russian market has dropped significantly. Meanwhile, oil continues to rise in price, updating one-month highs. After morning purchases, traders slowed down, but Brent is still holding in the green zone, strengthening for the fourth day in a row. If the current market sentiment persists in the coming days, we can expect a movement towards the $ 70 level. However, it is important to remember that oil prices remain sensitive to the negative, and therefore the appearance of any bearish factors can lead to a correction of futures from the highs. In the Forex market, the dollar is trading in different directions. Attempts to recover from strong retail sales in the US look sluggish and unconvincing, which indicates that players are not ready to resume buying the American currency, especially when global stock markets are trading at record highs in anticipation of further economic recovery and a retreat of the pandemic ._________________ Mikhail Kogan, Head of Research, “Graduate School of Financial Management”

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