The Russian stock market suffered its worst single-day decline in three years amid stalling peace talks with Ukraine. The Moscow Exchange (MOEX) Index, which includes the country’s 40 largest publicly traded companies, tanked by 4.05% to 2,563 points on Wednesday. This marks its worst day since December 2024 and its biggest single-day drop since September 2022.
Many of Russia‘s largest companies have taken significant hits, with the world’s largest natural gas producer, Gazprom, falling 4.1% and oil company Rosneft falling 2.5%. Sberbank, the country’s largest bank, dropped 4.9%, while the second largest bank, VTB Bank, dropped 4.7%.
It is also the fifth consecutive week in which the MOEX index has fallen. Since February, it has lost more than 22%, or 1.3 trillion rubles (£12 billion).
Overall, the Russian economy has been slowing as it haemorrhages money on its defence sector.
GDP growth was close to stalling entirely over the summer, growing just 0.4% year-on-year in July and August.
Banking profits also plummeted in August, according to data highlighted by Ukrainian banker Kyrylo Shevchenko.
He found that the collective profits of Russian banks fell to $2.4 billion (£1.79 billion), down from $4.7 billion (£ 3.49 billion) in July—a staggering 49% decline.
Mr Shevchenko noted that the corporate sector, particularly where floating-rate loans dominate, has been hardest hit by weaker margins.
He wrote on X: “The credit market is cooling, reserves are rising, and the era of easy wartime profits is fading. Despite surviving sanctions and high rates so far, the financial sector cannot remain immune to war and isolation forever.”
The clothing industry is also down 9.1%, furniture is down 12.7%, food by 2.1%, and metals by 8.4%.
This comes after the World Bank cut its forecast for Russia‘s economy to 0.9% growth in 2025, 0.8% in 2026, and 1% in 2027.
