Russian Stocks Slip Further After Losing $4.4bn on US Sanctions

Russian stocks slipped further on 18 July, after a plane was downed in eastern Ukraine, adding to the $4.4bn already lost from market capitalisation after the European Union and the United States passed new sanctions against Moscow.

The Micex dropped 1.9% immediately after trading reopened on Friday morning, the day after a Malaysian passenger airline crashed in Urkaine near the Russian border.

The rouble denominated Micex was down 1.6% at 0603GMT.

News that 298 had been killed in the plane crash came after the market had closed on Thursday.

Both Ukraine and Russia has accused each other of being behind the plane crash. Flight MH17 is thought to have been downed by a surface-to-air missile, although this has yet to be confirmed.

"The origin of the crash will only be revealed after the official investigation is finished, but in any case it has massively increased global attention on what is occurring in the conflict zone," Sberbank CIB said in a note.

"The vast majority of casualties are Europeans, which may turn EU public opinion towards introducing additional sanctions against Russia," it added.

The dollar traded RTS index dropped 2.23% to 1270.11 while the Russian rouble fell to 15.14 against the dollar on the back of the US and EU sanctions, its lowest level since May.

The United States and the European Union imposed a fresh round of sanctions on Russia over its role in the Ukraine crisis on Wednesday.

The latest American penalties are the most aggressive yet and target the country's biggest oil company Rosneft, the country's second largest gas producer Novatek and the country's third biggest bank Gazprombank.

The EU agreed to block loans for Russian public sector projects and consider tougher sanctions in the future.