Russian equities took a significant hit on Monday following the visit of Kremlin economic envoy Kirill Dmitriev to the United States, which seemed to yield no substantial outcomes in reducing tensions between Moscow and Washington regarding the conflict in Ukraine.
Dmitriev traveled to the U.S. for discussions just days after President Donald Trump imposed new sanctions on Russia and canceled a planned summit with President Vladimir Putin due to a lack of progress on achieving a ceasefire in Ukraine.
By 2:50 p.m. Moscow time, the MOEX index, which had already declined by 6.5% in the previous week, dropped an additional 3.2% to reach 2,457.87 points—its lowest mark since December 2024.
Investment banker Yevgeny Kogan noted that geopolitical uncertainty continues to drive the market downturn. “There is no light at the end of the tunnel. The ‘peacemakers’ have accomplished nothing, and the situation is nearing a stalemate,” he stated.
Leading the market slump were major oil companies affected by Trump’s sanctions, with Rosneft’s shares declining 5.6% to 368.4 rubles, their lowest since March 2023. Lukoil saw a drop of 6.5%, following a 12.2% fall last week, briefly reaching 5,242 rubles—the lowest level since July 2023.
These two oil giants, which together contribute to about half of Russia’s crude output, have experienced a combined market capitalization loss exceeding 900 billion rubles ($11.5 billion) since the sanctions were enacted.
Sberbank’s shares fell by 1.3%, VTB by 1.1%, Gazprom Neft by 4%, Nornickel by 4.4%, and Rostelecom by 3.6%.
According to analyst Vladimir Chernov from Freedom Finance Global, the decline in the market reflects the intensifying geopolitical tensions.
U.S. Treasury Secretary Scott Bessent labeled Dmitriev a “propagandist” after the envoy asserted that sanctions had “absolutely no effect on Russia’s economy.”
Trump criticized Putin’s announcement of a successful test of the nuclear-capable Burevestnik cruise missile, calling it “not appropriate.” “You ought to get the war ended, the war that should have taken one week is now in its fourth year; that’s what you ought to focus on instead of testing missiles,” Trump remarked to reporters.
Adding to the concerns of investors, the Central Bank has raised its forecast for the key interest rate to between 13-15% for the upcoming year, an increase from the previous estimate of 12-13%, as noted by Alexei Antonov, an analyst at Alor Broker. He pointed out that this adjustment also reflects the escalating geopolitical risks.
“There are no indications of a turnaround yet,” Antonov commented. “The next technical support level for the MOEX index is around 2,380 points, which corresponds to the lows of December last year.”
