Russian stocks sink to Feb. 24 lows, volatile rouble edges up

Increased risks of further Western sanctions sent Russian stocks plunging on Monday to their lowest since Feb. 24, the day Moscow sent troops into Ukraine, as voting continued in referendums that could see four Ukrainian regions annexed by Russia. High volatility has buffeted Russian markets in the last week.

Increased risks of further Western sanctions sent Russian stocks plunging on Monday to their lowest since Feb. 24, the day Moscow sent troops into Ukraine, as voting continued in referendums that could see four Ukrainian regions annexed by Russia.

High volatility has buffeted Russian markets in the last week. The rouble and stocks recovered ground after initially slumping as President Vladimir Putin said he had signed a decree on a partial military mobilisation, significantly escalating what Russia calls its "special military operation" in Ukraine. Voting is underway in four regions mostly held by Russian forces, the start of a plan by Putin to annex a big chunk of Ukraine in what the West says is a violation of international law.

"The Russian market is likely to encounter headwinds as sanctions risk increases," said Alfa Bank Equity Strategist John Walsh, pointing to an increased possibility of fresh EU and U.S. sanctions as fighting in Ukraine enters its eighth month. Diplomats last week said the European Union was looking at an oil price cap, tighter curbs on high-tech exports to Russia and more sanctions against individuals.

By 0938 GMT, the rouble-based MOEX Russian index was 8% lower at 1,921.7 points, its lowest since Feb. 24. The dollar-denominated RTS index was also down 8% to 1,050.4 points. ROUBLE GAINS

The rouble pared early losses to strengthen in a volatile session, amid wider turmoil on FX markets as sterling tumbled to an all-time low. The rouble was 0.4% stronger against the dollar at 57.67 , heading back towards its strongest point since July 22 of 56.6525 hit on Friday.

It had gained 0.7% to trade at 56.89 versus the euro , edging close to the near three-month low touched on Friday, and had firmed 0.4% against the yuan to 8.056 . The rouble's recent strength may seem abnormal, but the Russian currency has several growth drivers, said Alor Broker in a note.

"Dollars are being dumped due to fears of new sanctions being introduced, which will make trading in the U.S. currency in Russia if not impossible, then very difficult and expensive," Alor Broker said. Another support factor is a month-end tax period that usually sees Russia's exporters convert their foreign currency earnings into roubles to pay to the treasury, the peak of which falls today.

Brent crude oil, a global benchmark for Russia's main export, was down 1.1% at $85.24 a barrel.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)