Romanian shares plummeted on Monday, as all the world’s markets were hit by the Chinese ripple. The main index of the Bucharest Stock Exchange – BET closed the trading session down by 6.3%, its biggest daily drop in more than four years.

The BET recorded an even higher intra-day loss of 8.6% compared to the closing on Friday, and some of the most traded shares on the Bucharest Stock Exchange went down as much as 10% during the day.

Oil&gas group OMV Petrom’s shares (BVB ticker: SNP) were the hardest hit on Monday, closing down by 8.6% compared to Friday. The company’s stock was also hit by the drop in oil prices, which went down under USD 40 for the first time since early-2009. OMV Petrom already posted lower profits in the past year, due to the cheaper oil environment.

The shares of gas producer Romgaz (SNG), investment fund Fondul Proprietatea (FP), and Banca Transilvania (TLV) – one of the biggest local lenders also went down more than 6% on Monday. Electricity distributor Electrica (EL) was the least hit of the blue-chip stocks, with a 2.85% drop.

The sharp drop in prices triggered a selloff during the trading session on Monday, which at some points looked like panic. More than 14,000 share transactions were registered on the Bucharest Stock Exchange, totaling EUR 28 million, almost four times the average daily turnover recorded this year.

The Bucharest Stock Exchange’s website registered on Monday a five times higher number of simultaneous visitors than usual, and the intense market activity generated more than double the number of market data messages that have to be processed, according to BVB representatives. This caused the website to crash at one point during the session, according to Mediafax. However, this did not affect the trading activity, according to BVB.

Most of Europe’s markets recorded high losses on Monday, after the Chinese stocks plummeted by 8.5% on the same day, starting a selloff throughout the world. The main stock indexes in Germany and UK lost more than 4%, while markets in France, Italy, and Spain went down more than 5%. The US indexes also went down by about 5% in the Monday opening, after closing down by 3% on Friday, but recovered some of the losses later in the day.

The big drops may signal a new financial crisis, according to some analysts, as some of the world’s biggest markets, including the US, have reached new all-time highs earlier this year, fueled by cheap money injected by central banks to jump-start the world’s economies. Other analysts still believe that this is merely a normal correction and that the long-term trend remains positive.

However, should the trend reverse, the Romanian stocks may be among the hardest-hit, as the local market lacks liquidity. During the 2007-2009 financial crisis, the Romanian index BET lost more than 80% of its record value (recorded in July 2007). The Romanian shares haven’t managed to get close to those levels again in the past years.

editor@romania-insider.com