Russia shares tumble
July 28, 2014
Moscow's dollar-denominated RTS stock market index dropped 2.5 percent on Monday, while the broader MICEX index, which trades shares in Russian ruble, slumped 2 percent. The Russian currency itself was down 0.7 percent against the US dollar and the euro.
The third consecutive selloff in Russian share markets was led by state-owned oil company Rosneft, which traded 2.7 percent lower.
Rosneft shares were hit by an international court ruling on Monday that the government in Moscow pay shareholders in defunct oil producer Yukos $50 billion (37.2 billion euros) for expropriating their assets. Rosneft is not a defendant in the case and said it didn't expect any claims in connection with the ruling. But Russia's biggest oil producer is on a list of assets Moscow wants to privatize.
"Considering the onslaught of negative news, it will be harder to find buyers for the company's shares," Yuri Selyandin of investment firm GHP Group told the news agency Reuters.
Sanctions threat adds to Moscow's woes
Investors' appetite for Russian risk dwindled further on Monday after Germany stepped up its rhetoric on sanctions against Moscow over the conflict in Ukraine.
On Sunday, German Finance Minister Wolfgang Schäuble said Berlin would put peace before economic considerations and accept tougher sanctions.
"Economic interests are not the top priority. The top priority is ensuring stability and peace," Schäuble told the newspaper Bild am Sonntag.
Germany, which is Russia's biggest trading partner in the West, is backing an escalation of sanctions to punish Moscow for failing to stop the pro-Russian rebels in Ukraine. The EU outlined an agreement on Friday to impose a new round of measures, targeted for the first time at the country's financial and energy sectors as well as its military.
uhe/cc (Reuters, dpa)