Peaceful balance: The Moscow Stock Exchange index is promised to grow above 3,000 points

The Moscow Exchange index will gain a foothold at the level of 3,100-3,200 points if negotiations between Russia, the United States and Ukraine enter a constructive channel, experts interviewed by Izvestia are confident. Moreover, they called the lower boundary part of the basic scenario. The leaders of the United States, the EU and Ukraine met on August 18, after which quotes on the Russian stock market have already jumped above 3,000 points. This growth is due to the fact that politicians revealed the details of the negotiations at the White House — the market saw the continuation of an active discussion on the settlement of the conflict and reacted positively. What will happen to the Moscow Exchange index and the ruble by the end of the year is in the Izvestia article.

How did the Moscow Exchange react to Trump's statements?

Contrary to market expectations, after the talks between Presidents Vladimir Putin and Donald Trump, the Moscow Exchange index, which reflects the quotes of the "blue chips" of the Russian stock market, fell by 2.3% to 2,945 points on Monday morning, August 18.

That evening, the American leader met with his Ukrainian counterpart Vladimir Zelensky and a European delegation. Reacting to this, the Moscow Exchange index jumped above 3,000 points, with the benchmark peaking at 3013. So, in the morning the exchange opened at the level of 3005 points, which is 2% more than in the morning of the previous day, it follows from the data of the trading platform.

According to experts interviewed by Izvestia, the Moscow Exchange index will rise to 3,100-3,200 points in the next few weeks if negotiations on the Ukrainian settlement enter a constructive channel.

Despite the positive expectations from the meeting on August 15 in Alaska, investors are still behaving cautiously — they showed a reaction to uncertainty rather than diplomacy, Svetlana Frumina, Acting Head of the Department of Global Financial Markets and Fintech at Plekhanov Russian University of Economics, drew attention.

— Against the background of the contacts already held in Alaska, the market perceived the new meeting as confirmation and consolidation of the course for further negotiations. Therefore, his positive reaction can be described not only as the effect of the meeting itself, but also as the accumulated result of a series of negotiations. It reinforced investors' expectations regarding the reduction of sanctions pressure and the growth of foreign economic opportunities for Russian stock market participants," the expert emphasized.

In addition, the market reacted differently to the meeting with Zelensky and the Europeans, because the American leader revealed the details of negotiations with his Russian counterpart. So, more specific statements influenced the exchange.

During the August 18 meeting, Donald Trump reiterated that Russia and Ukraine must make a long-term peace, not just a cease-fire agreement.

"We will have a lasting peace. <...> I hope it will come immediately. I hope he [the conflict. — Ed. It won't have to last long," he said.

In addition, the politician admitted that in "a week or two" the prospects for resolving the Ukrainian conflict would be clear. Also, according to him, Putin agreed for Russia to accept security guarantees for Ukraine.

What will support the stock market in the summer and fall of 2025

Apart from geopolitics, the market is supported by fundamental factors. First of all, these are the actions of the Bank of Russia — at a meeting on July 25, it immediately lowered the rate by 2 percentage points to 18% per annum. From October to June, the regulator kept the key at a record level of 21%. The lower the key one, the less attractive the deposit yields will become, which means it will be more profitable for investors to buy shares, which will support their quotes.

In addition, deflation in the last four weeks and lower inflation expectations have strengthened risk appetite, which increases the likelihood that the Central Bank will continue to ease its monetary policy, said Vladimir Chernov, analyst at Freedom Finance Global. As Vladimir Putin noted on August 12, by the end of July, the annual price increase decreased to 8.8%.

The ruble will also support Russian quotations, Natalia Malykh, head of the Stock analysis department at Finam Financial Group, noted. She added: a moderate weakening of the exchange rate to 90-93 rubles/$ by the end of the year will support exporters and, consequently, their securities on the stock exchange. In addition, the market is feeling the dividend season now, Vladimir Chernov added.

On August 19, the Central Bank set the exchange rate at 80.42 rubles per dollar — so, over the past week, the Russian national currency has weakened by almost 1%.

At the same time, there are risks for the stock market. For example, the further escalation of the Ukrainian conflict and the outflow of capital, Vladimir Chernov drew attention. During the meeting on August 18, Donald Trump stressed that NATO would pay for the supply of American weapons to the Armed Forces. In this case, military pressure on Russia will continue in the long term, Natalia Malykh believes.

In addition, the growth of overdue payments in the banking sector due to the high debt burden of the population poses a certain threat, Vladimir Chernov added.

If geopolitical tensions continue and negotiations do not lead to anything, the Moscow Exchange index may return to the lower limit of the range and even drop to 2,800-2,850 points with increased sanctions pressure on the economy of the Russian Federation or its foreign economic partners, believes Vladimir Chernov. However, this is not the most anticipated scenario.

In the basic version, the index will fluctuate around 2,900-3,100 points in the near future, experts interviewed by Izvestia believe. If the negotiation process continues successfully, the indicator may grow to 3300-3400 points by the end of the year.