World Economy

Moscow Stock Exchange Suffers Temporary Outage

Moscow Stock Exchange Suffers Temporary OutageMoscow Stock Exchange Suffers Temporary Outage

The Moscow Stock Exchange resumed trading on the derivatives market MSK after being down for over two hours. Trading was halted at 10:25am due to what the bourse described as a system reboot. This is the fourth tech crash on the exchange this month.

The exchange resumed derivatives trading at 11:45am MSK, but then halted trading for the second time, RT reported.

“At the moment, there may be problems with the removal of applications on the derivatives market,” the exchange said in a statement.

“At 10:25am MSK trading on the derivatives market will be suspended for a technical reboot of the trading system’s data center. The time of resumption of trading will be announced,” it added.

The main indices continued trading without interruption. The dollar-denominated RTS Index was down 0.51%, while the ruble-traded MICEX was trading 0.24% lower, as of 12:30am MSK.

Last week, the RTS index dropped by almost 40 points in the space of a minute during trading for no apparent reason. The index went down from 820.91 to 781.92 points at 7:11 GMT, and stopped being broadcast online and on trading systems. The exchange was restored after an hour.

This is the fourth technical glitch on the Moscow Exchange this month. Trading had to be halted for two hours on September 8 due to a fault with the exchange’s computer server.

A week before that, trading on all markets was stopped for an hour due to a similar technical issue. Overall, Russia’s biggest exchange has had seven problems resulting in suspension of trading this year.

 Micex Index

The rally in Russian stocks traded in Moscow probably won’t last much longer as the benchmark index re-establishes its correlation with oil, which has plunged to less than half its five-year average price, according to Pavilion Global Markets Ltd, Bloomberg reported.

The ruble-denominated Micex Index has gained 22% this year, compared with a 13% drop in the MSCI Emerging Markets Index. In dollar terms, the Russian gauge is up 3.5% in 2015. The equity rally comes as Brent crude, the benchmark used to price the country’s exports, sells for less than $50 a barrel, about 30% below this year’s high. Slumping oil prices and sanctions linked to the Ukraine conflict have pushed the world’s largest energy exporter into its first recession since 2009.

While the depreciation of the ruble, which has weakened 19% in the past three months, might explain some of the resilience in locally traded Russian equities, the divergence between oil and stock prices appears extreme to Francois Boutin-Dufresne, a strategist at Pavilion Global Markets. He predicts a sharp decline in the Micex in the next six to 12 months.