MOSCOW. July 24 (Interfax) - The drop in price for liquid Russian shares had become very sharp by midday Wednesday on the heels of a record drop in U.S. stock indices on the previous day.
By 13:00 Moscow time, prices for blue chips were down 3%-7.8%, with many shares returning to the price level of last year. Gazprom shares saw the largest drop - plummeting over 11%.
Gazprom shares on the St. Petersburg Stock Exchange, traded through RTS terminals fell 11.9% to 23.83 rubles, passing all lower resistance levels.
The RTS index fell 5% to 333.36 points, easily falling below the psychologically important level of 350 points.
Dmitry Druzhinin, chief analyst with the Prospekt investment company, said that the Russian market has long resisted falling foreign stock indices, the decline was not as sharp as in the U.S. or Europe, mainly due to domestic demand.
"However, the patience of market participants has ended, sales have increased sharply and not only domestic investors are selling - but non-residents also," he said.
As regards Gazprom, the market has remembered the company's recent negative report for the first half, indicating a drop in net profit of over 35% year-on-year. In addition, investors' hopes that Gazprom shares would have the most growth potential in the oil and gas sector have started to shatter. These expectations could have been realized if reform had continued in the company and its share market had been liberalized. However, all that was promised was not fulfilled," he said.
According to Trinfiko expert Yevgeny Shtange, shares are now being sold throughout the market and the plummet in Gazprom share prices may be due to insider information, which the market will learn in two to three days. "It is likely that something is happening concerning the company, some negative event, which will come to light in the future," he said.
In addition to Gazprom, other companies to see a major drop in share price were Lukoil (-6.5%), Sibneft (-11%), Surgutneftegaz (-7.8%) and Yukos (-6.7%).