Russian Market Plunges 4.45% Amid Tensions, Sanctions Threat
Geopolitical tensions and economic sanctions have sent shockwaves through the world market, with the Moscow Exchange Index plummeting by 4.45% to 2604.55 points. The week saw a significant drop in oil prices and a strengthening ruble, while the IT sector struggled under increased tax pressure.
The G7 and EU are poised to impose fresh sanctions on Russia, targeting key sectors and countries aiding Russia in evading previous sanctions. Although no official announcement was made during the week starting October 3, 2025, the EU had previously unveiled a substantial sanctions package on July 18, 2025, focusing on Russia's energy and banking sectors.
Russian President Vladimir Putin's harsh reaction to Europe's militarization has further escalated geopolitical tensions. Meanwhile, the dollar fell to around 81 rubles, benefiting commodity stocks but hurting exporters' ruble revenues. Brent oil prices slumped to $64-65 per barrel, posting an 8% weekly drop, which weighed heavily on oil companies' shares and the Moscow Exchange Index.
Long-term investors are advised to keep an eye on the IT sector, which could potentially outpace the Moscow Exchange Index in the future. Despite the sector's recent struggles due to increased tax burden, analysts suggest that the Central Bank will maintain its key rate to combat inflation ahead of a VAT increase.
The Russian stock market's sentiment was dampened by weak oil prices, a strong ruble, and geopolitical uncertainties during the week ending October 3, 2025. As the market awaits further developments in sanctions and geopolitical tensions, investors are urged to stay vigilant and consider diversifying their portfolios.
