Shares of top Russian companies plummeted following news from the U.S.
The Russian stock market plummeted following news of a new U.S. bill aimed at significantly tightening sanctions against the aggressor country. Even though the bill has not yet taken effect, investors began panic-selling their assets, causing the Moscow Exchange index to drop to its lowest level since December 2022.
Overall, the market has fallen by nearly a quarter since the beginning of the year, and an additional negative factor was that the decline occurred despite rising global oil prices.
The hardest-hit were the shares of tech giant VK, which lost nearly 7 percent in value following the imposition of restrictions on the state-owned messaging app Max. Shares of other key market players also lost significant value, including VTB and Sberbank, the oil company Rosneft, Aeroflot, and the steel giant Severstal. Gazprom’s shares hit a new all-time low since 2008, a decline further exacerbated by reports that China had suspended negotiations on the construction of a new gas pipeline.
Financial analysts attribute this massive sell-off specifically to the details of a new U.S. bill previously introduced by the late Senator Lindsey Graham. The bill calls for the imposition of 100% tariffs on goods from China and India if those countries do not stop purchasing Russian oil. In addition, the initiative includes measures targeting the Central Bank of the Russian Federation, leading financial institutions, Russia’s “shadow fleet,” and large-scale liquefied natural gas extraction projects in the Arctic.
As a reminder, the bill on sweeping sanctions against Russia gained new momentum following the death of Senator Lindsey Graham. The White House has stated its readiness to support the bill, which aims to increase economic pressure on Moscow.
On the evening of July 11, Republican Senator Lindsey Graham of South Carolina and ally of Donald Trump died in the U.S. at the age of 72. According to the politician’s office, he passed away following a sudden and brief illness.
