MOSCOW, May 23 (RIA Novosti)-Russia's Finance Ministry said Tuesday that a fall in Russian share prices on Monday was a market correction.
The Moscow Interbank Currency Exchange suspended trading for one hour at 6:30 p.m. local time (2:30 p.m. GMT) Monday after shares fell more than 8.5% in the day.
But Alexei Savatyugin, the head of financial policy with the Finance Ministry, said the stock market had fallen by more than 10% Monday and indexes had gone down 25% since the public holidays earlier in the month, whereas the Russian stock market had increased by 51% since the start of 2006 to May.
"We hope that this is not a fall, but a correction, as the macroeconomic situation is only getting better," Savatyugin said.
"The correction that is happening on the Russian market is nothing unique," said Yevgeny Gavrilenkov, chief economist with the Troika Dialog investment company. "It is now happening on all emerging markets."
At the same time, considering that there is not enough accumulated capital on the Russian market, Gavrilenkov said the correction on the Russian market "has been deeper than in other countries."
Oleg Vyugin, the head of the Federal Service for Financial Markets, said he did not see any fundamental causes for a fall in the stock market.
"There are no fundamental reasons, but institutional investors have behaved like they are in a herd," he said. "Buying was in, but now selling is in."
He said the question was not why the Russian market was falling but why emerging markets were falling.
"It just so happened," he said, adding that as long as his service was raising interest rates, there was high demand for paper, but now the mood is to sell, and they have moved too far.
Vyugin said there were no serious fundamental factors either in Russia or in the world economy that could provoke a bigger fall on the market, adding that a measure of concern was only caused by inflation in the United States.
