MOSCOW – Regulators quickly halted trading on Russia's two major stock exchanges Tuesday after share prices dropped sharply in response to the economic bailout turmoil in the United States.
The ruble-denominated MICEX exchange said in a brief statement the Federal Financial Market Service ordered it to suspend trading until 12:30 p.m. (0830 GMT).
Shares on the MICEX sunk in the opening minutes of trading. Gas monopoly Gazprom plunged 7.8 percent, oil major Lukoil by 7.5 percent and state-controlled lender Sberbank by 7.6 percent. State-backed VTB bank shed 7.1 percent. The exchange's overall index was down by 1.07 percent when trading was suspended.
The dollar-denominated RTS — which opens later — said only that details on when it would resume trading would be announced later.
The U.S. House of Representatives narrowly voted against a massive $700 billion bailout plan for financial institutions Monday in the United States, triggering a terrified reaction among investors. The Dow Jones Industrial Average plunged 777 points on Monday, its biggest-ever one-day fall.
Russia's stock market, which earlier this year was one of the world's most robust and lucrative, has been in a steep decline for weeks, reflecting not only the turmoil in international markets but fears sparked by high-profile corporate conflicts and Russia's war with Georgia in August.
A sharp fall on domestic exchanges earlier this month — resulting in a two-day shut down of trading — led to a major loss of confidence among lenders. Since then, the Russian government has poured in billions of dollars into the banking system in an effort to ease liquidity concerns.
"Globally, investors are running from risk," Moscow-based UralSib bank said in a note to investors. "With the price of crude crashing back ... plus worries about the outlook for stability within the country's financial system, Russia is firmly in that category."