The current situation in Ukraine and Crimea could not but reflect on the stock market which was quite uneasy these days.
Uncertainty in the Kiev government, no comments from Russia have caused some serious fluctuations in the stock market recently with no one being able to provide accurate forecasts. However, after the official speech of President Vladimir Putin, the situation has stabilized. When the market was informed about the Russia’s position on Crimea, the stocks rebounded. Thus, the Micex Index rose 1.5%, closed up 2.4% and went on surging.
“Putin speeches always have a positive effect on the market as after that people see the certainty”, Director of Analytical Department at United Traders Mikhail Krylov said. He also highlighted the stock price dynamics at the moment Putin was delivering his speech.
This was mainly due to the details and plainness the president provided. However, not everybody shares the optimism as they associate the temporary rally with nothing but emotional part which is soon likely to vanish. Experts realize that sanctions from the West are imminent and the Micex can drop to 1,240 in case the measures will be too strict.
“The president’s speech should be welcomed by foreign investors as well as Russian ones. The international community’s greatest concern was the possible deterioration of the situation in Ukraine and, in particular, subsequent strengthening of Russia's presence in the East of Ukraine. So there was a clear intention to act according to international law, which was probably the reason why the market reacted positively. If the decline does take place, it will follow after new sanctions will be announced”, analyst at Investcafe Grigoriy Birg said.
