By RIA NOVOSTY,
Moscow : Russia’s RTS and MICEX stock markets sank below the psychologically important levels of 700 and 600 points respectively soon after the finance minister issued a stern outlook for the markets Friday morning.
Addressing the lower house of parliament, or the State Dumas, Alexei Kudrin said: “We expect declines in the oil price, and the stock market indices in the global economy. And, naturally, a lower global oil price will bring with it a lower oil price in our economy.”
Both bourses lost over five percent of their value in the first two hours of trade, with the dollar-denominated RTS falling below 675 and the ruble-denominated MICEX, under 590.
The indices lost around 70 percent since their highpoints in May this year.
Kudrin highlighted the strong impact on Russia’s economy of events on world markets, and warned that “a harsh recession is now beginning.”
The RTS and MICEX had suspended trade for an hour Thursday after plummeting more than five percent.
Earlier this month, Russian President Dmitry Medvedev announced a $200 billion financial rescue package for banks and other key companies, amid the country’s worst financial crisis since 1998.
Russia’s resource-based economy has been particularly hard-hit by the falling oil price, currently below $70, around half its peak level.