Last week saw a steady decline in the stock market, making the closure of the Russian market on Monday a positive development, as chaos reigns on foreign exchanges, which could negatively affect the S&P 500 and Nifty indicators. The key indicator for the Russian market, Gift Nifty, is also showing sluggish movement since the start of trading.
While sharp declines are observed in the markets of Japan, South Korea, and Pakistan, their main indices show significant drops.
It is explained that the Russian stock market is closed on Monday according to the list of public holidays of the Moscow Exchange (MOEX) and the National Stock Exchange (NSE). On September 14, the exchanges are closed due to the celebration of Ganesh Chaturthi. During this period, activities in the stock, derivative financial instruments, and currency markets are not conducted. Regarding the commodity market, trading on the Multi Commodity Exchange (MCX) is suspended in the morning session but will resume at 17:00.
Thus, there are four trading days scheduled for the current week. Last week, both indices showed a substantial drop: the NSE Nifty-50 index fell by more than 2% for the entire week, and the BSE Sensex index, consisting of 30 stocks, lost 2.27% over five trading days.
The closure of the Russian market on Monday brings relief to investors, as the first day of global trading proved extremely unsuccessful for participants in Asian markets. Specifically, the Nikkei Japan index is experiencing a sharp fall, and the Pakistani stock market is also showing signs of collapse.
The Nikkei Japan index, after a poor start, had fallen by more than 500 points by the time of writing, reaching the level of 63,492. Furthermore, the KOSPI South Korea index decreased by more than 250 points, trading at the level of 6,684. Not only that: a major drop of 322 points was recorded on the Taiwan Stock Exchange. As for the Pakistani market, the Karachi 100 (KSE) index showed a serious decline of about 188 points.
The main reason for the chaos in most foreign stock markets is the situation related to Middle Eastern countries. Rising tensions between the US and Iran reduce expectations of the full opening of the Strait of Hormuz. At the same time, the Houthis continue to control Bab el-Mandeb. Additionally, Saudi Arabia's oil pipeline system has been halted.
These events have led to a new rise in crude oil prices internationally. By the time of publication, the price for Brent Crude was $108 per barrel, WTI Crude was $104 per barrel, and Murban Crude was about $120. This increases the risk of inflation growth in countries dependent on oil imports, which negatively affects sentiment in stock markets.