(Bloomberg) — The last time Russian stocks fell as much as they have this week was when President Vladimir Putin cracked down on protesters following his election in May 2012.
Putin’s incursion into Ukraine’s Crimea region, like the imprisonment of demonstrators following his return to the presidency two years ago, is sparking investor concern that Russia’s economic growth will falter as the U.S. and Europe threaten the country with sanctions. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. has fallen 5.1 percent this week, the most since the measure dropped 11 percent in the five days to May 18, 2012.
President Barack Obama said the U.S. and its allies will keep raising pressure on Russia to back down in Ukraine and held open the possibility of further sanctions if Putin’s government doesn’t respond. The dollar-denominated RTS Index has tumbled 19 percent this year, the worst-performing equity benchmark among 94 gauges tracked by Bloomberg.
Obama spoke after Crimean lawmakers called yesterday for a March 16 referendum in a bid to return Ukraine’s Black Sea peninsula to Russia. JPMorgan Chase & Co. cut Russian stocks to underweight from overweight.
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“Investors hate uncertainty, and there is a lot of uncertainty about Russia,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private- banking unit of KeyCorp in Cleveland, said by phone yesterday. “Any time there’s a political turmoil, there’s an economic
The Micex Index gained 0.4 percent to 1,343.81 at 9:23 a.m. in New York. The measure has dropped 7 percent this week, also the most since May 2012.