Russian shares fell for a fourth straight day Thursday, entering a correction, while the ruble had its biggest three-day decline against the dollar since December as oil retreated and concern over Europe's debt crisis grew.
Preferred shares of pipeline operator Transneft slumped 5.7 percent, and Novolipetsk Steel dropped 5.5 percent. The losses led the 30-stock MICEX Index down 1 percent to 1,365.13 at the close, bringing its decline from an April 15 peak to 10.8 percent, surpassing the level of losses that constitutes a correction.
Crude oil traded below $80 per barrel for a second day as concern about Greece's debt crisis pushed the dollar to the strongest level against the euro since March 2009, reducing appetite for commodities as an alternative investment.
"Russia's equity markets were one of the best global performers during the first quarter's economic upturn and are now one of the worst in a downturn as world markets plunge from the latest debt crisis," said Chris Weafer, chief strategist at UralSib.
The ruble depreciated 1.6 percent to 30.46 per dollar at the close in Moscow, the weakest level since Feb. 8. That brought its three-day drop to 4.2 percent, the most since Dec. 8. It weakened 0.4 percent to 38.7294 per euro.
Investors increased bets that the ruble will weaken further, with non-deliverable forwards showing the currency at 30.74 per dollar in three months, compared with an NDF of 30.41 on May 6. The contracts are a guide to expectations of currency movements as they allow foreign investors and companies to fix the exchange rate at a particular level in the future.
The movements against the dollar and the euro left the ruble at 34.18 against the Central Bank's target currency basket.