Russia stocks fall after US vows further sanctions; Rusal slumps to record lows

  • The Moex index edged down around 0.3 percent during lunchtime deals in Moscow, extending losses of more than 4 percent over the last month.
  • The U.S. dollar-denominated RTS gauge was off by almost 1 percent.
  • On Saturday, the U.S., U.K. and France launched more than 100 missiles targeting Syrian government sites in response to a suspected poison gas attack on April 7.
  • The joint missile strikes prompted Russian President Vladimir Putin to warn Western powers that further attacks on the war-torn country could bring chaos to world affairs.
Russian Prime Minister Vladimir Putin
Alexey Nikolsky | AFP | Getty Images
Russian Prime Minister Vladimir Putin

Russia's stock market dipped on Monday morning, dragged lower by the prospect of fresh U.S. sanctions and lower oil prices.

The Moex index edged down around 0.3 percent during lunchtime deals in Moscow, extending losses of more than 4 percent over the last month. Meanwhile, the U.S. dollar-denominated RTS gauge was off by almost 1 percent.

Volatility on the Moscow exchange has surged since Washington targeted major Russian firms and some of the country's most prominent businessmen on April 6.

Shares of aluminum giant Rusal were down over 5 percent on the Moscow exchange, after falling 30 percent in Hong Kong and notching new record lows. Oleg Deripaska, the Russian billionaire behind the Hong Kong-listed stock, was one of the executives targeted by U.S. sanctions announced earlier in the month.

Syria fallout

On Saturday, the U.S., U.K. and France launched more than 100 missiles targeting Syrian government sites in response to a suspected poison gas attack on April 7. The joint missile strikes prompted Russian President Vladimir Putin to warn Western powers that further attacks on the war-torn country could bring chaos to world affairs.

Putin's comments followed reports that Washington is poised to increase pressure on Moscow with fresh economic sanctions on Monday. The U.S. administration is expected to try to punish Russia for propping up the ailing regime of Syrian President Bashar Assad.

Damascus and Moscow have both denied any involvement in the suspected poison gas attack which killed dozens of people in the Syrian town of Douma on April 7.

Last week, fresh measures from President Donald Trump's administration against Russian tycoons and businesses triggered a sell-off in the ruble and sent stocks cascading lower. Tensions between Washington and Moscow were then ratcheted higher as Trump warned the Kremlin to "get ready" for missile strikes in Syria.

The U.S. Treasury said sanctions imposed on April 6 were linked to Moscow's actions in Crimea, Ukraine and Syria. That same announcement prompted shares of Rusal to tank over 50 percent last Monday.

European equity markets are particularly sensitive to movements in Russian equities because several of its companies have operations based there.