The Moscow Exchange index closed the main session down 4.29% at 2,136.35 points, the sharpest one-day decline since September 2022, when the benchmark fell 7.49%. The dollar-denominated RTS index dropped 5.1% to 796.02 points.
By 10:42 p.m. Moscow time, including the evening session, Sberbank shares were down 1.4%, Magnit 3.2%, Gazprom 4.4%, Lukoil 4.8%, Rosneft 5.1% and Rusal 6.5%. Over Wednesday through Friday the index lost 8.4%, erasing in three days half of the gains accumulated over the previous month and a half.
The selloff was linked to escalating geopolitical tensions, Natalia Milchakova, lead analyst at Freedom Global, told RBC. The day before, Foreign Minister Sergei Lavrov again ruled out freezing the conflict along the front line and threatened harsher methods in response to Ukrainian attacks. The Foreign Ministry also rejected a ceasefire in the Black Sea proposed by Ukraine.
Investors had been awaiting visits to Kyiv and then Moscow by U.S. negotiators Steve Witkoff and Jared Kushner. President Donald Trump announced the trip almost two weeks ago, but it has yet to take place, analysts at Solid Invest noted.
"Faint hopes for hints of the start of negotiations to end the conflict have collapsed again. On the contrary, continued strikes on Russian infrastructure point to a growing likelihood of a widening federal budget deficit, which will be answered by a slowdown in key rate cuts," Andrei Zatsepin, an analyst at Alor Broker, was quoted as saying by The Moscow Times.
Persistent tensions could push the Moscow Exchange index further down, potentially to its annual low of 1,898 points, forecast Elena Kozhukhova, an analyst at Veles Capital. In late spring and the first half of summer, the market experienced its longest losing streak since 1997 — 17 consecutive weeks.