In his interview with the Nezavisimaya Gazeta daily, Evgeny Goryunov, Candidate of Economic Sciences, Gaidar Institute commented on the factors which triggered on Monday the fall of the Russian stock market which was similar to that seen late in February. Evgeni Goryunov notes that the partial mobilization was a substantial factor for it.

On Monday, the Moscow Exchange Index fell instantly below 1900 points for the first time since February 24. Within a single day, the Russian stock market lost nearly 10%, though later it tried to regain a part of its losses. On Monday, RGBI, the government securities index fell below 126 points, a four-month low. The yield of 10-year RF government bonds is growing; it is equal to about 11% (it points to the fact that risks are getting higher); last time it happened in April.

Downward trends prevailed not only in the Russian financial sector alone; global sovereign bond markets are on the threshold of their worst index values since 1949. The situation is aggravated by developed countries’ tightening of their monetary policy because of a record-high inflation rate. It primarily concerns the US Federal Reserve System which raised the base rate by 75 basis points to 3%–3.25% annually last week.

According to Evgeni Goryunov, a fall on the Russian stock market was caused not only by the growing global financial uncertainty alone, but mainly by internal factors, that is, the developments of the past week.

“The main factor for a fall on the Moscow Exchange was undoubtedly the declared partial mobilization,” Evgeni Goryunov believes.

But why could this news about the partial mobilization have such an impact on investors? According to Evgeni Goryunov, some concerns arise that a portion of workers will have to leave their jobs and enterprises will incur costs to replace them.

Also, overall “the level of uncertainties increases dramatically” both in geopolitical and economic terms. The question arises as to what new anti-Russian sanctions can be introduced and in what way they may affect economic processes, given that the reaction of friendly countries can be ambiguous, the expert notes.