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Moscow - Russia's leading stock markets suffered their biggest-ever one-day losses as shares went into free fall on the back of falling oil prices and deepening fears about the global economy despite the passage of a $700bn US bank bailout.
Trading on MICEX - the country's largest index - was shut down three times, closing down 18.6% to 752 points. The benchmark RTS - where trading was halted twice _- crashed to its lowest point since August 2005, falling by 19.1% to 866.4 points.
"The mood is kind of disbelief. You'd think we would have gotten used to it by now," said Ron Smith, strategist at Moscow-based Alfa Bank. "Traders are just sitting there staring at the screens and going 'wow'."
"In this environment, nobody wants to step up to the table and buy a stock," he added.
In September, growing financial turmoil in the United States and a wave of margin calls sent the Russian stock markets into their biggest downward spiral since 1998. The MICEX lost 25% in just three days, and prompted regulators to shut down the markets stem the decline. They have since used that tool on several occasions when falls have become severe - to lesser effect.
Russia's stock market in recent years has boomed amid high prices for oil and natural gas. But the market began falling sharply in midsummer amid concerns about government interference with businesses, and the drop accelerated as the global economic crisis intensified. Oil prices, the backbone of Russia's economy, have been sharply down in recent days - dropping to under US$90 a barrel - and investors have also been spooked by August's five-day war between Russia and Georgia. The RTS is now down by 64% from its May peak.
Banking stocks were among the worst hit on Monday in Russia. State-controlled Sberbank, the country's largest lender, shed 16.6% on MICEX, while the state-backed VTB banking concern shed 24.5%. Mining firm Norilsk Nickel plunged by 30.1% on the RTS on weak financials and plummeting nickel prices.
- AP