World Bulletin/News Desk
Moscow stocks fell, reversing gains from early Thursday, and the rouble weakened further after reports that the parliament of Ukraine's Crimea had voted in favour of becoming part of Russia.
At 1045 GMT, the dollar-denominated RTS index traded 1.9 percent lower at 1,159.6 points, down from the 1,180-1,880-point range where it traded before the news of the unanimous vote, according to Reuters calculations.
Russian news agency RIA also reported that Crimea's vice premier said a referendum on the region's status would take place on March 16 that would ask whether Crimea should become part of the Russian Federation. A Ukrainian minister said such a referendum would be illegitimate .
The rouble-traded MICEX lost 1.9 percent on the news to trade at 1,322.2 points. It had earlier traded in positive territory.
Mikhail Kantolinsky, equity trader at Uralsib in Moscow, said that local traders now have two fears.
"There is a fear of a war and there is a fear of a potential Ukraine default," Kantolinsky said. "The Crimean authorities are inclined to become part of the Russian Federation - Kiev, of course, will be against, and that means that an armed conflict may be inescapable."
The moves to formally bring the Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, under Moscow's rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation.
Trading volumes on Moscow indexes are low, said Sergei Filchenkov, head of investors relations at Metropol investment house.
"No one can guess what the trend is going to be," Filchenkov said. "There is a sentiment, however, towards buying the most liquid shares which lost in their values."
The rouble was down 0.4 percent against the dollar at 36.17 and down 0.3 percent versus the broadly weaker euro at 49.69, increasing its early-day losses.
Analysts at VTB Capital reckon that the rouble is about 8.0-8.5 percent behind the emerging-market average index so far this year, and Ukraine's political crisis has accounted for 2.0-3.0 percentage points of that.Last Mod: 06 Mart 2014, 14:31