Russian markets tumble as peace talks wither amidst tensions

The Russian currency and stock market are experiencing notable declines as a reaction to the failed peace talks concerning Ukraine. At 10:30 AM GMT, the dollar's exchange rate on the Forex market had risen by 1.5% to 82.71 roubles, and on the Russian interbank market, according to Reuters data, it even rose to 83.1 roubles, which is the highest level in a week. In the afternoon, this trend intensified.

The euro increased against the rouble by 2.2%, reaching 94.5 roubles, while the yuan's exchange rate on the Moscow Exchange rose by 2% to 11.35 roubles, also setting a weekly high. Foreign currencies increasing in value against the Russian one indicate a significant weakening of the rouble.

The Moscow Exchange Index, which neared the 3000-point level the previous evening, fell to 2900 points at the start of Wednesday's trading. The stocks of Russia's largest companies saw noticeable declines - "Gazprom" lost 3.2%, Sberbank 1.5%, VTB 3.1%, and "Rosneft" 2.9%.

Shares of companies like "Aeroflot," NLMK, MMK, and "Alrosa" each lost over 3% of their value. Freedom Finance Global analyst Vladimir Chernov states that "the negative dynamic is associated with geopolitics, as the planned talks in London concerning the settlement of the military conflict in Eastern Europe were cancelled."

Experts predict that by the end of the week, the rouble will likely continue to weaken, and the stock market will continue to decline. The dollar exchange rate could rise to 85-86 roubles, and the Moscow Exchange Index could fall to 2860 points.

After Volodymyr Zelensky publicly refused to recognise Crimea as Russian, as demanded by the United States in the peace plan, Marco Rubio, the head of the State Department, and the foreign ministers of France and Germany - Jean-Noël Barrot and Annalena Baerbock - withdrew from the negotiations.

As a result, the meeting will take place at the expert level rather than the ministerial level, as informed by the UK's Foreign Office. U.S. Vice President J.D. Vance stated that the United States would withdraw from the negotiation process if Moscow and Kyiv do not accept the American plan.

The State Department fears that Ukraine may revert to earlier hardline positions, which would prevent a breakthrough in the negotiations, according to Reuters sources familiar with the situation. These sources also indicate that the issue of easing sanctions remains unresolved - unlike the U.S., European countries are not prepared for such a step, as the "red line" for them remains the recognition of Crimea's annexation.