New sanctions cause Russian shares and ruble to tumble

The United States imposed its toughest sanctions yet on Moscow on Wednesday, and Russian stocks and the ruble tumbled on Thursday. Safe-haven assets such as gold, yen and German bonds rose. The ruble-traded MICEX stock market dropped 2.5 per cent in early deals, its dollar-traded cousin, the RTS index .IRTS, fell 3.2 per cent and the rouble RUB= dropped as much as 1 per cent against the dollar. The new US sanctions effectively shut off medium and longer-term dollar funding for companies close to Vladimir Putin. The EU also expanded its punishments for certain firms and said it would ask two of its development banks to halt their lending in Russia. The jitters gave safe-haven assets a broad lift amid concern about potential retaliation from Moscow and further escalation of the situation. The Japanese yen JPY=, Swiss franc CHF=, gold XAU= and German government bonds DE10YT=TWEB all rose in early European trade after what has been a subdued session in Asia. Elsewhere, the pan-European FTSEurofirst 300.FTEU3 fell 0.3 per cent, according to Reuters