Russian stocks plummeted, and the ruble dropped to its lowest point in years Thursday following Russia's invasion of Ukraine. The Moscow stock exchange temporarily suspended trading earlier in the day, but almost all of the stocks on the bourse crashed immediately when trading resumed.
When trading resumed, the MOEX Index dropped by more than 45% before recovering slightly. The main ruble-denominated benchmark of the Russian stock market closed the day 33% down. The U.S dollar-denominated RTS Index also crashed, ending the day down 39%. Overall, the crash on Thursday wiped out an estimated $70 billion from the value of major Russian companies listed on the exchange.
Russian banks and oil businesses were among the most affected, with Russia's largest lender, Sberbank, losing 43% of its market value in just hours. Russian oil giant Rosneft, which BP holds a 19.75% stake in, also 43% of its value. In London, BP shares fell 4.6%. The big gas corporation driving the Nord Stream 2 project, Gazprom, was down 35% after closing.
In a statement, Russia's central bank said it had instructed brokers to halt short sales given the current situation in the financial market and to protect the rights and legitimate interests of investors. The move implied that investors could no longer borrow securities to sell in the hopes of buying them back at a lower price.
After hitting a new record low of 89.60, the ruble was trading at around 88 to the dollar, down 8%. The Russian central bank said that it would intervene in the currency market and give more liquidity to banks.
Investors ran for the exit amid concerns that the U.S. and other western nations may impose a wave of sanctions against Russia over its attack in Ukraine. Russian Vladimir Putin had ordered his troops to attack and take control over major infrastructures in Ukraine, including several airports.
Following Moscow's announcement that it will send soldiers into two separatist areas of eastern Ukraine, the United States, European Union, the United Kingdom, and other allies placed limited sanctions on Russia earlier this week. Germany announced that it would halt the certification of the contentious Nord Stream 2 gas pipeline, which would have increased the supply of natural gas from Russia to Europe.
Russian troops assaulted from three sides hours before daybreak and swiftly expanded over central and eastern Ukraine. More than 40 military and up to ten civilians were killed, according to Ukrainian officials, while the deputy interior minister claimed fighting was still ongoing at an airfield near Kyiv.
