FX.co ★ Russian Stocks Fall Toward 10-Month Low

In October, the MOEX Russia Index dropped to 2,550, marking a test of the year's low points as an influx of new sanctions against Russia clouded the outlook for the nation's major energy companies and posed challenges for Moscow's fiscal stability. Notably, Rosneft and Lukoil experienced significant declines, reaching their lowest levels in two years, in response to sanctions imposed by the United States. These two oil giants, accounting for around half of Russia's oil exports and a substantial share of the federal budget's revenue, faced heightened scrutiny. Furthermore, Indian refineries indicated that the U.S. sanctions could disrupt oil orders from Reliance and public-sector processors, thereby amplifying the measures' impact. In a similar vein, concerns arose over Novatek and Gazprom as the European Union planned to ban its members from purchasing Russian LNG by 2027. Compounding these pressures, equities faced downward momentum due to the Bank of Russia's recent decision signaling a continuation of restrictive policies, despite a modest rate cut. Since August, Russian stocks had seen a significant decline, influenced by increased inflation and reduced public spending outside of the defense sector, resulting in decreased domestic economic activity.