Russia's stock markets followed Asia into the red on Monday morning in reaction to the US downgrade by Standard & Poor's on Friday.
Russia's RTS stock exchange index was down 2.46 percent to 1754.44 at 1 p.m. Moscow time, and the MICEX was down 1.73 percent at 1559.61. The RTS plunged nearly four percent in the first ten minutes of trade on Monday.
The RTS index dropped 3.72 percent to 1,739.88. The index of the Moscow Interbank Currency Exchange (MICEX), which opens half an hour later, fell about 2.7 percent to 1,544.10 at opening of trade.
The ruble plunged 63 kopecks against the euro to 40.86 and 18 kopecks against the dollar to 28.50 on the MICEX exchange.
The value of the bi-currency basket, comprising $0.55 and 0.45 euros, increased by 38 kopecks to 34.06 rubles at 1 p.m. Moscow time compared to the closing of the previous trading session.
"As far as Russia and Russia’s financial markets for the balance of 2011 are concerned, the key link remains the oil price," VTB Capital investment bank said in a research note.
"Both the ruble and the RTS Index have already overreacted relative to the oil price moves compared with their behavior in 2011 so far ... Obviously, as the events of the weekend amplify the dislocations induced by the fallout of last week ... the near term dynamics might be quite wobbly."
Asian stock exchanges closed 3-4 percent lower with the Hong Kong's key stock market index Hang Seng losing 2.17 percent to the previous close to 20,490.57. Korea's KOSPI plunged by 3.82 percent to 1,869.45, Shanghai's SSE Composite by 3.79 percent to 2,562.82 and Japan's Nikkei 225 by 2.18 percent to 9,097.56.
