Russia’s benchmark RTSI stock index is taking a pounding on Monday, thanks to the failure of the world’s biggest oil producers to agree a deal on a production freeze.
That failure sent oil in free fall, which in turn has caused investors in Russia’s oil reliant economy to sell up as fast as possible on Monday.
Just after 9:20 a.m. BST (4:20 a.m. ET) the RTSI is off more than 3.3%, having lost more than 4% of its value as the market opened for the week. Here’s how that looks:
Russia’s other major share index, the MICEX, has slipped 1.25% on the day.
Several oil producers, responsible for almost half of the world’s output, failed to reach a production-freeze agreement at a meeting in Doha on Sunday. Consequently oil has fallen more than 4.5% on Monday morning, and, given that Russia is the world’s biggest producer, stocks are taking an absolute beating.
Here’s how Brent crude, the European oil benchmark, looks on Monday morning:
Oil prices are likely to remain under significant strain in the coming weeks, and as Business Insider’s Greg McKenna pointed out on Sunday evening, the lack of a deal puts that rally under pressure and leaves traders with no clear guide to when the widening gap between oil supply and demand will be closed.
That means that any respite for Russian stocks probably won’t be forthcoming in any time soon.
Elsewhere in Europe, stocks are also under pressure, although losses are limited so far. Here’s the scoreboard:
- Britain’s FTSE 100 — down 0.55%
- Germany’s DAX — down 0.5%
- France’s CAC 40 — down 0.69%
- Italy’s FTSE MIB — down 0.79%
- Euro Stoxx 50 — down 0.79%