Russian equities were mired in a steep decline on Thursday as
news of a plane crash on the Ukrainian-Russian border sent
shockwaves through the financial community.
Stocks in this emerging market nation had recently hit their
highest level in five months before the breaking news ratcheted
up selling pressure.
The Market Vector Russia ETF (NYSE:
) is the most widely-followed index of 50 publicly-traded
companies located in or deriving a significant portion of their
business from Russia. This ETF has more than $1.6 billion
in total assets spread primarily among large-cap stocks in the
energy and materials sectors.
At one point on Thursday, the RSX had declined more than seven
percent during the trading session on significantly
The RSX is now down 14.48 percent on the year amid concerns
over sanctions against the country and further social unrest. In
order to restore calm to the markets, Russia will likely need to
work with world leaders to ensure they were not responsible for
any wrongdoing in this incident.
Other ETFs that were adversely affected by this event include
the Market Vectors Russia Small Cap ETF (NYSE:
) and iShares MSCI Russia Capped (NYSE:
), which declined 5.76 and 6.99 percent, respectively.
Russian News Agency Says Malaysian Plane Has Been
Shot Down In Ukraine
also reported that the Russian ruble currency lost 2.3 percent
versus the dollar in Moscow.
In response to heavy global selling, the CBOE VIX Volatility
Index spiked more than 30 percent on Thursday as well, sending
the iPath S&P 500 VIX Short-Term Futures ETN (NYSE:
) sharply higher.
The VIX Index is widely considered to be a measure of expected
fear in the market based on S&P 500 Index options
The summer doldrums and slow grind higher in the global equity
markets have now been replaced with a sense of concern about the
potential for further selling ahead.
However, additional technical and fundamental data will be
needed to evaluate whether this is a short-term dip or the start
of a more pernicious decline.
© 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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