Russian Stocks Plunge on Eurozone Worries

The Russian ruble and stocks sank further at the end of trade on the MICEX-RTS Exchange on Monday, as investors cut exposure to risky assets amid deepening concern over Spain and the prospects for the eurozone.

As of 6:00 p.m. Moscow time (14:00 GMT), the Russian ruble extended further losses against major world currencies, plummeting by 70 kopecks against the greenback to 32.74 and by 60 kopecks against the euro to 39.59.

Russia’s ruble-denominated MICEX stock index sank by 3.09 percent to 1,371.58 points while the dollar-denominated RTS plunged by 5.13 percent to 1,319.58 points.

The Russian markets sagged in response to negative news from Europe, where the yields on Spanish government 10-year bonds hit a new euro-era high of 7.5 percent on Monday on fears that one of the eurozone’s biggest economies might seek a full-blown sovereign bailout.

The European markets were depressed by the reports that U.S. rating agency Egan-Jones had cut its rating on Spain for the sixth time since mid-April, rating it at double-C-plus from triple-C-plus.

“In addition to the expected austerity riots, the latest news is that Valencia and other regions will need $15 billion of aid, the senior debtholders of the weak banks will be forced to take losses and there might be some sharing of losses among all banks,” Egan-Jones said in a statement.


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