Russia in financial free-fall as Syria backlash sees market conditions ‘like a volcano’

Wednesday, April 11, 2018
By Paul Martin

RUSSIA is facing financial turmoil after US sanctions against the country sparked the worst market session in four years in a backlash against Vladimir Putin’s support of Syria.

Wed, Apr 11, 2018

The rouble plunged 4.1 percent against the dollar, while the country’s bonds also plummeted as traders described conditions as “like living on a volcano”.

Donald Trump has imposed fresh sanctions on Russia and a handful of influential oligarchs in response to Putin’s support of Syrian President Bashar al Assad after he allegedly carried out a chemical attack on civilians.

Confidence in Russian stocks has slumped, sparking a mass sell-off that sent Moscow’s blue-chip MOEX index down 8.34 per cent.

The rouble dropped against the dollar despite rising prices of oil, the country’s main export, as investors continued an asset sell-off fearing more sanctions.

Inherent risks for Russian credit and assets have substantially increased as the Kremlin fights to find a way to retaliate against President Donald Trump.

But rich Russians remain dismissive about their losses, with one consoling himself with the thought he had once lost $1billion in a single day.

Kirill Dmitriev, head of the state-run Russian Direct Investment Fund, told reporters to keep things in perspective.

He said: “We think it is an absolutely short-lived market reaction, which in large part is driven by speculators.”

After losing $250m on Monday, Oleg Tinkov, founder and chairman of Tinkoff Bank, said he was unfazed.

He said: “There were worse days.

“I remember losing $1bn in one day so it was actually a very positive day yesterday … Being on the Russian stock market is like living on a volcano.”

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