Russian Stocks, Ruble Fall over Ukraine Crisis
Russian stock markets fell on Monday as investors expressed alarm at the escalating crisis in Ukraine following the Malaysian plane disaster and the prospects of tougher sanctions doing more damage to the Russian economy.
Moscow's ruble-denominated Micex stock exchange was down 1.27 percent in late morning trading, while the dollar-denominated RTS was down 1.32 percent.
The two markets have fallen by nearly five and seven percent respectively since Wednesday.
The ruble also fell against the dollar and the euro, with the dollar worth 35.12 rubles and the euro 47.50 rubles.
The ruble had plunged on Friday in response to the air disaster and new U.S. sanctions against Russia.
The United Nations Security Council was set to vote later on Monday on a resolution calling for an immediate ceasefire and unrestricted access to the crash site for international experts, while European foreign ministers were to meet on Tuesday to discuss further sanctions.
"There are not many reasons for optimism locally," Alfa Bank analysts said in a research note, highlighting "increasing concerns on geopolitical risks."
"The next 48 hours are crucial for determining the further path of developments over the situation in eastern Ukraine," VTB Capital financial group said in a research note.
Russian markets had reached one of their highest levels of the year in early July but nosedived after the latest United States sanctions were imposed Wednesday, directly targeting Russian energy giants and banks. They then fell yet further following the downing of the Malaysia Airlines liner in a separatist-controlled area of eastern Ukraine on Thursday.
At Berenberg bank in London, economist Holger Schmieding, commenting on months of crisis over Ukraine, said: "Russia has maneuvered itself into an uncomfortable corner.
"Despite its clear military edge on the ground in Eastern Ukraine, its strategic situation looks weak. In a worst-case scenario, Russia could turn itself gradually into a paranoid pariah state with a crumbling economy and mounting internal tensions."
