The Russian stock market has suffered its biggest plunge in three years after stark statements from Russia's Foreign Ministry made it clear that hopes for an end to the war in Ukraine have all but vanished.

Source: The Moscow Times, an independent Amsterdam-based news outlet

Details: On Wednesday 8 October, the Moscow Stock Exchange index fell to 2563.3 points, its lowest level since December last year, dropping 4.05% compared with Tuesday's close – the largest single-day fall since September 2022.

Shares in major Russian companies fell, with Gazprom down 4.1%, Sberbank 4.9%, VTB 4.7% and Rosneft 2.5%.

Severstal shares fell 4.9%, Aeroflot 5%, while Rostelecom, Inter RAO and Magnitogorsk Iron and Steel Works dropped more than 5%. Mechel saw a 6.7% decline.

Yaroslav Kabakov, strategy director at the Russian financial services company Finam, said geopolitical factors continue to pressure investors and the market had been hit by panic selling.

The collapse came after Deputy Foreign Minister Sergei Ryabkov said relations with the US have been "destroyed to the foundation". He added that Moscow sees no reciprocal steps from Washington and that the momentum from the Alaska meeting between Kremlin leader Vladimir Putin and Donald Trump has been exhausted.

Kremlin leader Vladimir Putin told generals at a meeting of the General Staff of the Russian Armed Forces yesterday that their objective remains unchanged – to "ensure the unconditional achievement of all the goals of the special military operation".

Background: The Moscow Stock Exchange index has been falling for five consecutive weeks and has lost more than 22% since February, equivalent to 1.3 trillion roubles (about US$15.9 billion) in market capitalisation.

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