In our interview, former Senior Vice President of Otkritie Bank and economist Konstantin Vladimirovich Tserazov shared the main events of September in the stock markets.
The start of the fall season brought a correction to the markets, with the Moscow Exchange ruble index declining by 2.8% in September, and the dollar-denominated RTS index plummeting by 4.2%. The primary reason for the sell-off was negative sentiment on external markets, according to the expert. For instance, the U.S. S&P 500 index lost 4.87% amid expectations of the Federal Reserve tightening its monetary policy. Additionally, the lack of significant growth drivers after the end of the summer dividend season, concerns about China's economic slowdown, and the threat of sanctions from the EU also played a role.
Konstantin Vladimirovich Tserazov remarked, "Despite the corrections and the absence of serious growth ideas, the Moscow Exchange index managed to stay above the psychologically significant 3000-point mark thanks to the support of a weak ruble and high oil prices."
Among the significant market events, Konstantin Tserazov highlighted the Bank of Russia's decision to raise the key interest rate by 100 basis points to 13% per annum. The regulator indicated that the period of high interest rates would last for an extended period due to rising inflationary pressure. The market reacted predictably to the regulator's decision with a moderate correction. Another significant event was the Federal Reserve's meeting in the U.S., which began on September 19. As expected, the Federal Reserve maintained its rate in the range of 5.25-5.50%. However, the regulator signaled that it does not rule out another rate hike later this year.
Nevertheless, despite the corrections and the lack of significant growth ideas, the Moscow Exchange index managed to stay above the psychologically significant 3000-point mark thanks to the support of a weak ruble and high oil prices. In September, the price of Brent crude oil reached $97 per barrel due to Russia and Saudi Arabia's voluntary reduction in production and the persistent market deficit, noted Konstantin Tserazov.
The beginning of October continued the corrective mood in the Russian market. Konstantin Tserazov forecasts, "The market currently does not see growth impulses, but it is not in a rush to make significant downward corrections either. High interest rates are weighing on the stock markets, and investor interest is shifting towards other instruments. It is unlikely that we should expect strong movements in October; instead, the market is likely to remain neutral and move towards consolidation."