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. Last Updated: 07/27/2016

Stock Market Plunges on RTS

The stock market made a zigzag on the week and the RTS index dropped 0.94 percent to 197.20 driven by external factors.

"Hedge funds were shifting to oil stocks while local brokers kept buying power and telecoms that were underperforming the market at the start of the week," said Vladimir Detinich, head of research with Olma brokerage. "When people understood that no new money was coming in, the market sagged."

The RTS rebounded to close at 212.91 Tuesday, but when the Nasdaq tumbled in the middle of the week on weak third-quarter earnings reports, local stocks followed suit.

The Nasdaq was down 8.5 percent last week to 3,361, sending a negative signal to all emerging markets, and Russia was no exception.

Oil stocks weathered the storm best. Surgutneftegaz was 1.7 percent up to 30 cents per share, Tatneft gained 2.2 percent to 52 cents a share and LUKoil was down 0.2 percent to $14.37.

Rostelecom, the most correlated with the Nasdaq, was again an underdog, shedding 11.5 percent to $1.42.

But the market regained some life Friday after traders gave their positions a critical look.

"Traders started to ask themselves whether the market had fallen too much in the previous days," said Denis Sarantsev, a trader with Aton.

Unified Energy Systems opened up at 12 cents per share Friday, but closed at 12.5 cents, still down 6.7 percent on the week.

Hit by chilly winds from across the Atlantic, local stocks ignored a string of positive news released last week.

December Brent futures was up 0.87 percent to $30.10 per barrel, fueling expectations of rainfall profits in the oil industry.

The State Duma passed the budget on first reading, dodging a clash with the government on issues related with budget spending.

The nation’s international reserves surged to $25 billion, up 100 percent since the year’s start, and may reach $30 billion by year-end if oil prices hold firm.

"I think the market will be higher in one to one-and-a-half months," Sarantsev said. "Everybody is on edge after such losses, so it will take time before people calm down."