OREANDA-NEWS. On October 1, the Russian stock market kicked off in moderately negative territory, heading further south as the day wore on, a report published by Antanta Capital investment bank reads.

The RTS Index slid 1.19% to 2,047.09. Turnover on the benchmark and MICEX was run-of-the-mill. Quite plainly, local investors were flummoxed when Western bourses bucked the downturn and resumed the northbound track, whereas Russian stocks sank deeper
into the red.

The banking sector fell victim to a crisis of confidence. In the first hours of trading two leading Swiss brokerages, UBS and Credit Suisse, announced a sharp pullback in profit margins along with steep losses. Yesterday afternoon, the market was dealt another
blow after governance from Citi Group, a top global investment bank, predicted a 60% drop in Q307 net income and pre-tax losses totaling $1.3 bn as a result of loss-making transactions with subprime loan-backed securities.

Unsurprisingly, bank stocks underperformed European and Russian markets by a wide margin. Once again, the session’s heaviest casualty was VTB, which tumbled 2.26%. Leading brokerages, meanwhile, continue to downgrade their recommendations for Russian’s second biggest lender following the release of its H107 financials. Oil names also suffered substantial setbacks, as sell-offs picked up momentum and crude prices slid 1.5%. Hardest hit were Lukoil, which shed 2.3% and Tatneft, which plummeted 3.2%.