Ruble drops, stocks mostly retreat after aborted uprising in Russia

A hot dog cart stands near the New York Stock Exchange (NYSE) on Wall Street in New York City on January 18, 2023. Wall Street stocks climbed early on January 18, 2023, on easing worries about further Federal Reserve moves to aggressively counter inflation following the latest US economic data.
ANGELA WEISS / AFP

NEW YORK, United States — The ruble reached a 14-month low against the dollar on Monday while US and European markets mostly retreated after a short-lived mutiny in Russia stoked concerns about the nuclear-armed country's stability.

While the advance by the Wagner mercenary force led by Yevgeny Prigozhin was called off before it reached Moscow, analysts said the rebellion showed President Vladimir Putin's grip on power was more fragile than previously thought.

While there was unease on trading floors, European stocks closed with small gains and losses, and Wall Street indices finished a choppy session lower, with large tech shares tumbling.

Asian markets also finished lower.

The ruble hit 85.37 to the dollar -- a level last seen in April 2022 shortly after Moscow's invasion of Ukraine -- but the Russian currency recovered slightly later.

Moscow made an effort on Monday to portray a return to business as usual, and Putin praised industry for overcoming "severe external challenges" in a video speech to a youth engineering forum.

Equity markets in Europe and the United States took the weekend's attempted mutiny in Russia in stride.

"If there is concern about how events in Russia might play out the view appears to be let's worry about it when and if it happens, rather than worry about what might happen," said CMC Markets analyst Michael Hewson.

"Markets have been taking a 'tread carefully' approach at the start of the week, said Tim Waterer, chief market analyst at KCM Trade.

Prior to Prigozhin's revolt, traders worried about slowing growth in major economies and the prospect of further interest rate hikes by Western central banks battling high inflation.

Events in Russia have added "another layer of uncertainty to the equation," Waterer said.

Rate concerns

Investors were keeping tabs on comments from Federal Reserve officials, hoping for clarity on their monetary policy plans after boss Jerome Powell last week warned interest rates would likely keep rising.

A survey Monday showed German business sentiment fell more than expected in June, as clouds gathered over Europe's largest economy, also in recession. 

The Ifo institute's confidence barometer, based on a survey of 9,000 companies, fell for the second month in a row.

This week's calendar in the United States includes durable goods orders for May, data on personal income and prices for the same month, plus a reading on consumer confidence.

Powell is scheduled to appear at a central bank forum in Portugal on Wednesday.

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