Investor explains the market’s reaction to Putin’s words

The Russian stock market accelerated growth on Russian President Vladimir Putin’s statement about the Russian economy’s resilience, TASS reports.  

Photo: President of Russia Vladimir Putin delivers his annual Address to the Federal Assembly. Sergey Savostyanov / POOL

The Russian market depends more on the domestic agenda than on the global one, emphasizes a private investor, Fyodor Sidorov, private investor and founder of the School of Practical Investment explained. The indices of MosExchange and RTS have been declining in recent days in anticipation of the President’s Address to parliament on February 21. They went up after Vladimir Putin announced many economic initiatives, the expert adds.

“A rise of the minimum wage, a state program for preferential housing rental for defence industry and similar initiatives carry a positive message for various sectors of the economy and stimulate consumer demand. Accordingly, the stock market began to grow,” the investor told Invest Foresight.

At the same time, other major exchanges (in the United States, Europe and Asia) are influences by statistics and the Federal Reserve’s actions, Fyodor Sidorov continues. The regulator’s rate hikes to curb inflation are bad news for the stock market and usually lead to corrections. In the same way, stock indices are affected by statistics that reflect accelerating inflation or GDP slowdown.

“At the moment, critical geopolitical events (such as the mounting tension around Taiwan) can trigger a fall in the stock markets, while the growth of China’s GDP will be a positive factor, as it will stimulate growth globally,” the expert adds.

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