Russian stocks and the ruble have been battered as markets re-opened after the Russian Orthodox Christmas and New Year holidays amid a renewed plunge in oil prices to a 12-year low.
Following a 10-day festive break, Russia's dollar-traded RTS index fell 4.8 percent to 701.21 when it re-opened on Monday morning, the lowest level since December 2014, and was still down by the same amount in midday trade.
The MICEX index was also trading 3.46 percent lower by midday. The ruble had also fallen to its all-time weakest level against the dollar, at 76.49 before paring some losses to trade at 75.2570 by midday.
The decline in Russian assets comes as oil prices continued to defy gravity, with Brent and U.S. WTI crude trading more than 1 percent lower, around the $32 mark. Oil prices have fallen more than 10 percent since the start the year with investors betting on further declines.
Prices continued their downward trajectory on Monday as a slowdown in China continued to rattle investors and dented the outlook for demand amid a continuing glut in supply.
Falling oil prices will only serve to hurt Russia further. It is a major oil producer and relies on the revenues from its oil exports. Coupled with international sanctions on Russia for its annexation of Crimea in March 2014, and role in a pro-Russian uprising in east Ukraine, that prompted capital flight and a sharp drop in the ruble, Russia entered a recession in 2015 from which it is yet to emerge.
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Oil prices are certainly not predicted to rise any time soon, analysts believed, signaling little respite for Russia.
"The ongoing decline in commodity prices is doing little to instil confidence in investors," Craig Erlam, senior market analyst at OANDA said on Monday. "Oil suffered considerable losses last week and have got off to another bad start today, as the oversupply story is once again being compounded by concerns over Chinese growth and demand," he said.
"China is one of the world's largest consumers of oil so any slowdown in the country leading to a fall in demand will only apply further downward pressure to prices at the worst possible time. It seems that oil in the low 20's, which would have been unthinkable a couple of years ago, is now a real possibility," Erlam added.
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow CNBC International on Twitter and Facebook.