Market Return on the Moscow Exchange: Opening Day Recovery and Expert Commentary
On March 24, trading activity on the Moscow Stock Exchange resumed after nearly a month of suspension ordered by the Central Bank. The halt began on February 28 and followed the steepest drop in the Russian stock market since trading began, as the market faced the pressures of a military escalation in Ukraine. In the weeks after the February 24 start of the operation, the Moscow Exchange index had fallen by about 45.4 percent, reflecting the shock across markets and investor sentiment.
The trading session, conducted in a condensed window from 9:50 to 14:00 Moscow time, saw 33 companies that are part of the Moscow Stock Exchange index participate. The day closed with the index rising by 4.43 percent to 2,579.99 points, while the RTS dollar index declined by 9.11 percent to 851.62 points. This snapshot illustrated a cautious, yet meaningful rebound that attracted attention from traders and analysts alike.
Among the gainers were PhosAgro with a 26.68 percent rise, Tatneft up 19.26 percent, NOVATEK at 18.43 percent, FGC UES up 18.29 percent, Surgutneftegaz gaining 17.68 percent, and Rosneft advancing 16.97 percent. Analysts from BC Mir Investments noted that exporters were expected to be among the leaders on the list, with FGC UES appearing as a surprise element in the early results. The broader context remained that foreign players were still watching key names such as Transneft, MTS, Detsky Mir Group, and VTB show mixed performances, with declines ranging from around 6 percent to 6.5 percent for some large players.
Aeroflot stood out on the downside, dropping about 16.06 percent, which experts acknowledged as a notable exception in the otherwise positive mood. The foreign segment showed declines as well, with Transneft down roughly 6.02 percent, MTS down 5.89 percent, Detsky Mir Group down 5.64 percent, and VTB down 5.62 percent. The day highlighted the uneven performance across sectors and the influence of external factors on investor behavior. Market observers attributed much of the activity to a combination of renewed appetite from institutional players and the Central Bank, while retail interest remained more restrained. The overall turnover reached approximately 108.6 billion rubles on the exchange, with individuals accounting for about 58.2 percent of trades. Market watchers noted the presence of a sizable buyer in the market, underscoring persistent demand despite volatility. The day also illustrated a pronounced depth of market with hundreds of millions of rubles scheduled for purchase across most securities.
In the session summary, investor demand did not reach peak levels. Yet institutional buyers and the Central Bank contributed to a more orderly market environment. The depth of market demonstrated robust demand for major names such as Sberbank, Gazprom, Lukoil, Rosneft, and Norilsk Nickel, while overall volumes remained well below the February 2022 peaks. The day was not without its hiccups; technical issues affected some online platforms and brokerage services, including those associated with VTB and Tinkoff Bank, briefly impacting trading flow as activity resumed.
Why did the shares of Russian companies rise and what lies ahead?
Kirill Komarov, who leads investment analytics at Tinkoff Investments, described the opening day as a surprisingly positive development for investors who had missed the market. He noted that a recovery in most current securities followed the February panic selling, inspiring renewed confidence among Russian investors. He predicted continued positive market dynamics into the coming week, while acknowledging that volatility would likely ease gradually as trading matured. The early data showed the Moscow Exchange index rising quickly in the first minutes and then accelerating to double-digit gains before settling at a more moderate level. Analysts also cautioned that certain restrictions remain in place, including a ban on short selling and limits on capital flows, which can restrain sustained momentum and shape asset price movements. These measures, together with the actions of residents and non-residents, contributed to market stability during the initial rebound.
Fyodor Sidorov, founder of the Practical Investment School and a private investor, suggested there are reasons to anticipate continued improvement after the abrupt market drop. He argued that headlines may have overstated risks, and that the current policy response from the Central Bank and the Ministry of Finance has helped stabilize sentiment. Sidorov projected a gradual recovery in indices and securities of Russian companies, though he cautioned that highs from the autumn of 2021 were unlikely to return soon. He also pointed to external pressures, including ongoing conflicts and the policy stance of the US Federal Reserve, as factors that could weigh on the market in the near term.
Nikolay Vavilov of Total Research emphasized that the recent uptick might not be sustained. He highlighted the impact of the short-selling ban and the retreat of non-residents as headwinds, noting that a reversal would depend on those restrictions being lifted and a shift in non-resident selling. He characterized the surge as a momentum-driven response from the first trading day of a month, predicting that the next day would not replicate the same vigor. Together, these expert voices illustrate a market in transition: cautious optimism tempered by policy constraints and external shocks, with a path forward that will likely require time and continued stability from domestic policy actions and external economic signals. The overall tone suggested a cautious path to recovery rather than an immediate return to prior peaks, as traders balanced risk with the potential for future gains. University researchers and market strategists agreed that the road ahead would be shaped by macroeconomic policy, sanctions dynamics, and monetary policy actions from major economies. This combination would determine whether the rebound could gain sustainable traction or fade beneath ongoing volatility.