Russia shares shrink after sanction, Malaysia jet crash

Russian capital markets took a further tumble at the weekend after the crash the Malaysian Airlines jet crash with 298 people aboard in Ukraine dramatically raised tensions between the Kremlin and the West. The disaster which claimed the lives of all 298, came few hour after Washington and Brussels introduced biting new sanctions against Moscow on Thursday, with United States targeting companies in the military, energy and finance sectors. ‘The plane catastrophe was a real shock for those investors who had started to believe that it was all about de-escalation,’ said Slava Smolyaninov, chief strategist at Uralsib Capital. In Moscow, the ruble-denominated Micex stock index fell by 1.67 per cent in early trading on Friday, and the dollar-based RTS index was down 2.23 per cent. The ruble fell to 35.1 to the dollar and to 47.5 to the euro. Shares in flagship airline Aeroflot were down 2.97 per cent to 55.60 rubles after the company restricted some of its flights to Ukraine. Shares in state oil giant Rosneft, one of the main targets of new sanctions against Russia over the crisis in Ukraine, fell further, losing 1.49 per cent to 230.22 rubles. The introduction of a new round of Western sanctions had also triggered a sharp fall in Russian markets on Thursday, with shares in two energy giants targeted by punitive measures, state oil firm Rosneft and private company Novatek, also taking a pummeling, according to AFP.