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Russian Stocks Dragged Down by Political Energy Woes

The Russian stock market is underperforming other emerging markets as the country’s oil giants such as GazProm drag the RTS Interfax Index down on political concerns.

"The domestic sectors are the sectors that are doing well, up about 20% this year," Chris Weafer, chief strategist at Alfa Bank told “Squawk Box Europe.”

But because "oil and gas and GazProm account for almost two thirds of the market, and because they are down about 20% … we have the Russian equity market underperforming this year," Weafer said.

The decline in GazProm and other oil and gas stocks is due to Russia’s failure to come to strategic agreement about energy with the European Union. In addition, tensions between Russia’s President Vladimir Putin and EU leaders have grown over recent months.

"We need to see the government moving on its promised next phase for the economic story," Weafer said.