The Russian market has been, since the week's start, tying in its hopes and apprehensions with American monetary policies. Today's market strategy wholly depended on the US bank rate and the tentative pace of its further rise.
As we learned last night, the Federal Reserve System sent the rate 0.25 per cent up to 2.75 per cent. The System stays true to the moderate pace at which it has been raising the rate, though it highlights domestic inflation pressure growing.
Inflation expectations may come to an edge in the United States. That prospect has hit all markets, say experts.
"US indices came down alongside petroleum prices. Our market did not stay aloof to the change," says Sergei Kosynkin of the Zerich investment company.
Russian response to the final Federal Reserve System decision became clear even a few minutes after exchange opening, this morning.
"Blue chips plummeted against yesterday's closing time when the session had barely opened," says Dmitri Royenko, Olma investment company capital investment board manager.
High inflation expectations will send the US bank rate up ever quicker now, experts assuredly forecast.
In an apprehension of the rate coming up more aggressively, bears are ruling the day in the stock and raw material markets alike, so Russian corporate stock is getting down all the quicker, points out Mr. Royenko.
Yukos bankruptcy prospects are adding fuel to the fire. The petroleum mammoth leads the list of plummeting stock, adds Mr. Kosynkin.
US inflation figures were made public last night. They proved worse than expected, and the market again came down just after bulls took courage in an anticipation of good news, says Roman Andreyev of CenterInvest Securities Co. Things look rather dark, but the matter can be cured if good news of reforms and other political developments comes to encourage the market, he added.
The Russian Trading System had come 2.32 per cent down by 17.04, Moscow time, to 658.63. The classic RTS market saw 238 transactions to a lump $29.4 million.
Yukos, the quickest to plummet, had come 10.71 per cent down by that time. The Sibneft made the smallest fall, 1.56 per cent. The LUKoil was 3.13 per cent down, and the UES 3.21 per cent.
The LUKoil and the UES accounted for the greatest number of stock deals, to $8.4 million and $5.3 million, respectively.
