Russian stock market sees longest decline in 30 years

The Russian stock market has been declining for 18 consecutive weeks, with the MOEX index falling to its lowest level since October 2022. This is the longest period of decline since 1997. The index, which tracks 46 of Russia's largest companies, dropped 8.72% over the past week, reaching 1,958.4 points—a level last seen in the summer of 2016. Overall, market capitalization has lost nearly 30% in recent months.

Major companies have suffered significant losses: Gazprom shares fell 21%, VTB 21.1%, Surgutneftegaz 20.8%, and Magnit 19.6%. Severstal dropped 17%, Norilsk Nickel 24%, Aeroflot 26.7%, and MTS 28%. Russia's largest gold producer, Polyus, lost 53% of its value in just two weeks. Sberbank and Rosneft shares have fallen 10% since the start of the month.

The market is under pressure from geopolitical tensions, the threat of new sanctions, and expectations that the Central Bank of Russia will raise interest rates due to the fuel crisis. However, analysts at Kit Finance suggest there is also hidden selling pressure: some large owners are systematically divesting their Russian assets. According to Bloomberg, billionaires, including those close to Vladimir Putin, have been actively moving money out of the country, fearing economic deterioration, banking system issues, and asset confiscation to cover the budget deficit.

Tatiana Stanovaya, founder of R.Politik, noted a growing sense of impending catastrophe among the elite. Resources are running out, and more enterprises are losing viability. The fuel crisis, losses at the front, and economic problems are likely to push Putin toward escalation rather than reconciliation. Andrey Khokhrin, CEO of Ivolga Capital, stated that the economic failure in the stock market will demand victims. Economic growth has nearly stalled—only 0.2% from January to May—civilian sectors are shrinking, and investments have fallen the most since 2009. Indicators suggest that the Russian economy will enter a recession in July, which according to experts from the CMACP analytical center (close to the government), will last at least a year.