End of Stabilization: Stock Market in the Russian Federation Crashed Down

Real collapse is registered on the Russian stock market on Monday. The index of MICEX as of 3:40 p.m. of Moscow time decreased on 6,29% - to a level 1675,85 items, the index of RTS fell on 6,72%, its value made up 2013,95 items. Thus the volume on the classical market of RTS exceeded 68 million dollars that spoke about high activity of the tenders.

The leaders of falling are shares of "Surgutneftegaz" (-10,5 % and-9 % accordingly) both in RTS and on MICEX. Actions of "Norilsk Nickel" became cheaper on MICEX on 7,7%, RAO "UES of Russia" - on 8,4%, LUKOIL - on 7%, Sberbank - on 7,5%. In RTS falling of prices for shares of RAO "UES" - 8,8%, "Norilsk Nickel" - 8,3 %, LUKOIL - 7,8%.

Falling of index of MICEX occurred on a background of universal decrease on the markets. The collapse started from Japan where the share tenders were closed by falling of index Nikkei up to a two-year-old minimum. It was reaction of investors to last unfortunate week for the American market of shares and new signs of recession of the largest economy in the world.

The share markets in India were the next to crash down. There the tenders finished with falling of index BSE on 1356,3 items (-7,14%). The basic index of a stock exchange in Mumbai (former Bombay) BSE was falling during trading session on almost 11% and leading index of National stock exchange NSE - on 10,6%.

As well as BSE Sensex 30, according to the results of tenders NSE returned lost positions a little bit, having closed in minus on 8,61%. The tenders stopped twice to avoid total collapse of indexes during session.

On the trading platforms of the Peoples Republic of China the day also ended unsuccessfully - index of Shanghai stock exchange Shanghai Composite there fell today to 266,08 items (-5,14%) and Hong Kong Hang Seng - on 1383 items (-5,49%). Unlike the Japanese market general negative situation on tenders in China was aggravated not by a rate of national currency but by corporate news. So, shares of airline Air China Ltd. fell up to a day time limit (-10%) after attempt of the company to get a share in China Eastern Airlines Corp. failed.

News from one of the largest Chinese insurers company Ping An Insurance Co. didn't add optimism, it informed about its intention to carry out additional emission of shares and to issue convertible bonds for a total sum 22 billion dollars. The shares of the company also reached a day time "bottom" limit and fell in price on 10%. The Chinese raw companies also finished the day with downturn: quotations of oil-extracting PetroChina fell up to 4,8% and steelmaking Baoshan Iron and Steel - on 7,8%.

Bank of China provided falling among the Chinese banks, its shares fell up to 4,7%. It happened after analysts assumed that the bank could write off on results of III quarter of 2007 actives for the sum 17,5 billion yuans (2,4 billion dollars) because of crisis in the American hypothecary market. Quotations of Industrial and Commercial Bank of China Ltd. (-4 %) and China Construction Bank Corp. (-3,3 %) fell after the shares of Bank of China.

In South Korea the leading index of Seoul stock exchange KOSPI on results of today fell up to 2,95% having updated five-monthly minimum. Here manufacturer of liquid crystal TVs LG.Philips LCD Co. (-4,67%) and also ship-building companies Hyuindai Heavy Industries (-5,77%) and Samsung Heavy Industries (-10,4%) became the leaders of the fall. All in all starting from the beginning of the year South-Korean KOSPI lost 11% having stopped today on a mark 1683,56 items.

Other Asian share platforms also showed serious decrease according to the results of a day. Thus, Indonesian index Jakarta Composite fell on 125,25 items (-4,8%) - up to 2485,88 items and Thai SET Composite - on 21,50 items (-2,7%) having made 768,17 items.

The basic influence on the tenders in Asia by tradition is rendered with news about condition of economy of the USA - the largest commodity market for the every possible Asian goods. News of the last week could hardly be named consolatory and they only strengthened confidence of investors that the largest economic could avoid recession. Thus, the volume of construction of new houses in the USA in December 2007 decreased on 14% - up to 1,006 million units that became the worst parameter from 1991.

The chapter of Federal Reserve System (FRS) of the USA Ben Bernanke once again recognized that the American economy was in difficult position and emphasized necessity of acceptance of measures for its stimulation in order to prevent recession. Thus the president of the USA Georges Bush proposed to reduce tax loading to 1% of gross national product or 140 billion dollars, however, analysts had already expressed an opinion that those measures would not help to avoid economic recession. As a result the forward decrease noticed on the previous week on all world markets made today next coil on the tenders in Adia where banks and companies-exporters became the main victims.

However the matters are not in better condition in the Europe where the share tenders on the 21^st of January, 2008 started with essential decrease of leading indexes on a background of corporate news. It's also connected with the fact that investors are afraid of recession of economy of the USA and delays of economic growth in the Europe.

The tenders for representatives of financial sector began unsuccessfully. Investors apprehended half-heartedly the application of a member of board of the European central bank (ECB) that economic growth in the Europe could be slowed down more strongly, than it was expected. On that background tenders quotations of the largest Netherlands financial company ING Groep NV (-2,7%), the third largest British bank Barclays Plc. (-2,7%), the sixth largest British bank Lloyds TSB (-1,9%), the second largest Dutch insurer Aegon (-2%) went down at the first hours.

The trading session started didn't inspire optimism to representatives of mining sector also. Moods of investors were affected with information which appeared in mass-media that the largest representative of the sector given BHP Billiton Ltd. can not make new offer on purchase of the third in the world mining company Rio Tinto. The deadline of the announcement of the official proposal about purchase - the 6^th of February, 2008, however, management of BHP Billiton hadn't even gathered for a meeting. On this background the shares of Rio Tinto cheapened on 6.7%.

Negative tendencies influence opening of trading session and shares of the world's largest reinsurance company - Swiss Reinsurance Co. Analysts of the largest Swiss bank UBS lowered valuations at the cost of shares of the company in connection with fears of greater losses on a background of unstable situation in the credit market. The sahres of the company cheapened on 6,8%.

Quotations of the world's largest British supplier of building materials Wolseley PLC at the moment of the opening of tenders went down up to record for the last 5 years level (-12%). It happened in connection with application of the company about profit decrease for the last 5 months.

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