The MOEX Russia Index fell to below 2,800 in the latter part of September, tracking the broad pressure on Russian assets on the pessimistic outlook for the Russian economy. The US pressured G7 countries to tighten sanction against Russia due to their invasion of Ukraine and recent airspace violation on NATO members, driving Brussels to propose stricter penalties against Russian oil and financial companies and the anticipation of total Russian LNG ban. This magnified the impact of low natural gas prices on major Russian producers, with Gazprom trading relatively close to its record low at RUB 120 per share. In the meantime, sanctions also threatened to target tankers and third countries still buying Russian oil and fuel, extending deep losses for Lukoil and Rosneft since the start of the year. Broad pressure on the Russian corporate sector was also owed to bets that the CBR may have finished its cutting cycle as higher taxes in Russia's new budget may rekindle inflation.
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