Russian Stocks Continue Fall on Greek Tragedy

Russian stocks continue falling on Friday, hitting fresh lows as investors deserted emerging markets amid political uncertainty in Greece and the European debt crisis.

By 11:07 p.m. Moscow time, the ruble-denominated MICEX had hit an eight-month low, down 2.59 percent to 1,254.46 , while the dollar-denominated RTS plunged by 3.05 percent to 1,273.37 points, the lowest level since October 2011, and was close to May 2010 levels.

The ruble fell by 33 kopecks against the dollar to 31.38 rubles and by 31 kopecks against the euro to 39.78 rubles on Friday morning. The price of Brent crude, a benchmark for the Russian stock market, fell one percent to $106.50 per barrel.

Fitch Ratings downgraded Greece’s long-term foreign and local currency issue default rating to ‘CCC’ from ‘B-‘ earlier on Friday over growing risks.

“Fitch’s downgrade reflects the heightened risk that Greece may not be able to sustain membership of the Economic and Monetary Union. An exit of Greece from EMU would be probable if the June 17 new general elections fail to produce a government with a mandate to continue with the EU-IMF program of fiscal austerity and structural reform,” Fitch said in a statement.

Investors also reflected negatively on the news that Moody’s downgraded the long-term debt and deposit ratings of 16 Spanish banks on Thursday over their “adverse operating conditions and reduced creditworthiness of the Spanish sovereign … which affects the ability of the government to support banks”.

In Asia, Japan’s Nikkei closed 2.99 percent lower to 8,611.31, while the South Korean KOSPI went down 3.4 percent to 1,782.46 on news from Europe.


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