MOSCOW, March 12 (RIA Novosti) – Russian equity markets fell sharply Wednesday as the Kremlin appeared to be gearing up for a full-scale annexation of the southern Ukrainian peninsula of Crimea amid international tensions.
The MICEX Index fell 1.64 percent after trading began in Moscow, while the dollar-denominated RTS Index dropped 4.02 percent. Stocks later pared losses, but both bourses were down almost 1 percent at midday.
Markets have been under pressure since troops wearing Russian uniforms seized military installations in Crimea in apparent bid to gain control of the territory after the Ukrainian opposition swept to power in the capital, Kiev.
About $60 billion was wiped off the value of Russian equities in the first day of trading following Russian President Vladimir Putin’s receipt of parliamentary approval to move soldiers into Ukraine.
International leaders have condemned Russia and threatened to impose economic sanctions if Moscow does not remove the troops.
“[We] now expect that Russia will try to retain Crimea because there has been more affirmative action from Russia to increase its presence in Crimea,” one Moscow-based investment bank said in a note to its clients Wednesday.
The Crimean parliament declared independence in a vote Tuesday and a referendum on joining Russia is scheduled for March 16.
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The British experience can be instructive for Russia. London retains its British Commonwealth if it wants to use this as a foundation for integration in the future. That’s a valuable lesson for Russian experts who are calling for an end to “ineffective” associations like the CIS, the Russian World and others.