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The MICEX Index fell 1.64 per cent after trading began in Moscow, while the dollar-denominated RTS Index dropped 4.02 per cent. Stocks later pared losses, but both bourses were down almost 1 per cent at midday.
Markets have been under pressure since troops wearing Russian uniforms seized military installations in Crimea in apparent bid to gain control of the territory after the Ukrainian opposition swept to power in the capital, Kiev.
About $60 billion was wiped off the value of Russian equities in the first day of trading following Russian President Vladimir Putin’s receipt of parliamentary approval to move soldiers into Ukraine.
The Ukraine standoff is re-stirring tensions between Russia and the Western nations who have threatened to impose economic sanctions if Moscow does not remove the troops.
However, in a note released by ratings agency, Care Ratings, said the EU and US would vary in the degree of response to Russian moves in Crimea.
“The Eurozone is fragile as it has freshly emerged from its own crisis and at such a juncture it would be wary of cutting ties with an international superpower and major trade partner. Its reliance on Russia for energy will also induce caution. In contrast, the U.S. is weaning itself off Russia’s energy supplies and its trade relationship is much less intertwined and hence has been in a position to be sterner on Russia,” said Care Ratings.
Oil prices have spiked up since the crisis commenced with concerns of oil outflows from Russia.
“West Texas Intermediate (WTI) in particular has crossed the $100 a barrel mark. It has increased from $ 96.46 on 2nd February 2014 to $ 101.12 on 10th March 2014. It was the highest at $ 104.92 on 3rd March when the geopolitical tension between the countries was at its peak,” said the Care Ratings report.
The Crimean parliament declared independence in a vote Tuesday and a referendum on joining Russia is scheduled for March 16.
TBP and Agencies