VZCZCXYZ0011
PP RUEHWEB

DE RUEHMO #1106 0731533
ZNR UUUUU ZZH
P 141533Z MAR 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 8260
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS MOSCOW 001106 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/RUS 
TREASURY FOR BAKER/GAERTNER 
NSC FOR TRACY MCKIBBEN 
USDOC FOR 4231/IEP/EUR/JBROUGHER 
 
E.O. 12958: N/A 
TAGS: EFIN ECON RS
SUBJECT: RUSSIAN STOCKS DOWN AFTER U.S., ASIAN MARKETS SLIP 
 
REF: MOSCOW 841 
 
¶1.  (U) This message is sensitive but unclassified and not 
for Internet distribution. 
 
¶2.  (SBU) U.S. economic reports that sent the NYSE and NASDAQ 
tumbling on March 13 had a similar effect on the March 14 
trading session in Russia.  The opening of the March 14 
trading session saw the benchmark, dollar-denominated RTS 
Index 2.5 percent lower, and the broader, ruble-denominated 
MICEX Index was 4.4 percent lower; as of 6:20pm Moscow time, 
the indices were down 2.29 percent and 2.92 percent, 
respectively.  Alfa Bank Chief Economist Natalia Orlova 
suggested that the lackluster figures have made relatively 
nervous investors more jittery about the short-term prospects 
that the U.S. "economic engine" can continue to support other 
economies. 
 
¶3.  (SBU) Troika Dialog Chief Economist Evgeny Gavrilenkov 
observed that lower crude oil prices have also added to 
short-term worries.  He said the drop in the indices reflects 
concern about the percentage of market capitalization that is 
dependent on oil.  Gavrilenkov noted that losses during March 
14 trading would probably still be in line with his and other 
analysts' expectations for the post-Shanghai correction.  He 
observed that both RTS and MICEX had been tredning gradually 
upward in the last week. 
 
Comment 
------- 
 
¶4.  (SBU) The main Russian indices remain within the 
consensus estimates for this correction.  Most analysts 
forecast that losses could extend until mid-April and that 
RTS and MICEX could lose 20 percent off their February 27 
"peaks."  If our contacts have characterized the current 
Russian investor sentiment accurately, we would expect stock 
prices to track closely with upcoming key economic data 
releases in the U.S., Europe and Asia. 
BURNS