The conglomerate's London-listed global depositary receipts also fell 30 percent in early trading.
In early morning trade, Russia's rouble-denominated MICEX index was 1.9 percent lower at 1,449 points, while the dollar-denominated RTS index was 0.9 percent lower at 1,189 points. Bashneft shares slid 13 percent, while MTS was down 10 percent.
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"Such a dramatic turn of events comes as a surprise regardless of the market knowing there was an open investigation into the privatization of Bashkir Oil and Energy Group," analysts at Sberbank CIB investment bank wrote in a note.
"The risk of a change in the shareholder structure of Bashneft escalates, a risk that now spreads to Sistema's other assets."
The Moscow Exchange restricted trading of Sistema's shares within an hour of the market opening.
"Clearly all this comes at a particularly inopportune time for Russian markets, given concern over developments in Ukraine, the imposition of Western sanctions, and also the weak underlying growth story in Russia," said Timothy Ash, chief emerging markets analyst for Standard Bank in London.
In currency markets, the ruble strengthened slightly against both the dollar and the euro, stabilizing after sharp falls over the previous week.
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On Tuesday, the central bank said it was starting overnight ruble-dollar swap operations to increase short-term banking sector liquidity, pushing the rouble higher in late trading on the Moscow Exchange.
Russian banks and companies have experienced a shortage of dollars in recent weeks after several waves of Western sanctions against Moscow for its involvement in the Ukraine crisis limited their access to foreign capital.
During early morning trade, the ruble was 0.07 percent stronger against the dollar at 38.29 and gained 0.11 percent to trade at 49.58 versus the euro.
That left the currency 0.1 percent stronger at 43.38 against the dollar-euro basket the central bank uses to gauge the ruble's nominal exchange rate.