Russia’s dollar-denominated Russia Trading System (RTS) opened at just over 1,000 points on March 10, crashing by 600 points from its January high on the first day of trading after oil prices collapsed at the weekend.

“Russian equities and the ruble to open on the back foot, but panic selling not expected: This morning we expect the local Russian market to open about 15% lower to price in the selloff on global markets and Russian GDRs on Monday as well as the new reality with oil prices and the oil price outlook as well as a weaker ruble. The ruble is expected to open about 5-6% lower versus the US dollar. However, we expect both the ruble and Russian equities to pare back opening losses during the day. Considering the stabilisation evident across Asian markets this morning, we may see the RTS and MOEX close today about 10% lower. Oil & gas stocks and banks, as well as the more liquid stocks are likely to see the bulk of the selling. We expect Russian GDRs to pare back some of yesterday’s losses today,” Alfa Bank said in a note.

The market crashed to levels last seen in 2015. The RTS was at 1,088 after the first hour of trading as equity investors fled the market, fearing a repeat of the 2014 collapse of oil prices. That is down almost 600 points from the recent high of 1,651 set on January 20 during a brief bout of optimism that came with the traditional spring rally.

The Russian market was up almost 50% in 2019 and equity investors were hoping some sort of normality had returned to the stock market after six years of sanction-induced stagnation.

However, that feel-good factor has completely evaporated after the OPEC+ production cut deal collapsed on March 6, and a price war has broken out between Russia and Saudi Arabia that sent oil prices down to $32 on March 9. The price of oil has recovered a little to $36.22 as of 9am on March 10, but analysts are expecting oil prices to remain subdued for months, if not years.

The ruble-denominated MOEX Russia Index has also fallen heavily from a January high of 3,226 on the same day as the RTS high to open at 1,799 on the morning of March 10.

At 1,000 the RTS is testing the lows struck in 2014 when the oil prices last collapsed. During that shock the RTS briefly dropped below 700 to hit a low of 667 on December 17, 2014, before recovering to trade between 750 and 820 until the middle of February. During the rest of the winter months of that year the RTS remained range bound between 850 and 950, before breaking out above 1,000 in March 2015.

For the rest of 2015 the RTS remained stuck in a band between 800 and 1,000 with a few regressions caused by new rounds of sanctions and tense politics in the wake of Russia's annexation of the Crimea the year before. That kept the RTS at 1,000 or below for almost all of 2016 and 2017 too.

It was not until 2018 that the RTS began to rise to a new band of 1,100 to 1,300 as companies started to recover from the shock of the crisis years and investors began cherry-picking the best names so that individual stocks such as X5 Retail Group doubled in value.

This trend continued until 2019, when the recovery of the market became broad-based and the RTS climbed to the 1,600 mark set in January this year to become the best performing market in the world.

Now the oil shock means the RTS have given up about five years of gain in just a few weeks and if previous form is anything to go by, the RTS will recover a little from this dip but will take several months to find a new lower level and remain there until there is some clarity on oil prices and production deals.