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Russian stocks hit hard by US sanctions

Russian stocks slumped on Monday as new US sanctions targeting President Vladimir Putin's allies rattled investors.
The dollar-denominated RTS index fell more than 11% in Moscow and the Rouble dropped to its lowest level since last November, trading at 59.82 against the dollar, but recovering slightly to 60.31."Investors are punishing the Russian stocks on the back of the new US sanctions on Russia," Naeem Aslam, chief market analyst at Think Market UK, said."The Russian rouble is the worst performing currency among 24 emerging market currencies."The impact of sanctions can also be seen in the commodity market, crude and Brent; both have moved higher."Russian billionaire Oleg Deripaska, one of Britain's best-known Russian oligarchs, saw the firms he owns fall the hardest.His aluminum giant Rusal, which controls 7% of the global supply, halved in Hong Kong. Rusal said sanctions may hurt its ability to repay debts and it could also lose access to the US market.Jersey-based En+ Group, which manages Mr Deripaska's assets, slumped by almost 42% in London. The company admitted the sanctions were "highly likely" to impact its business.
Russian stocks hit hard by US sanctions

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Why oligarchs are facing sanctions
Miner Glencore, which owns a stake in En+ Group, dropped 3.4% and Russian steelmaker Evraz, which is not on the sanctions list, had tumbled 14.5% by market close, the day's biggest faller.Washington imposed sanctions on 24 Russian oligarchs and 12 companies under laws passed for meddling in the 2016 US election.Bill Browder, the British financier and anti-corruption campaigner whose fund once held the largest foreign investment portfolio in Russia, told Sky News that the companies and institutions targeted by the US were all close to Russian President Vladimir Putin, and in some cases managed assets and the Russian leader's behalf.While US citizens cannot hold stocks or do business with the targeted companies, new restrictions also apply to international investors who "knowingly facilitate significant transactions" on behalf of those sanctioned.
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That means banks and commodity traders are also more likely to shy away from trading in dollars with the Russian companies.The Russian Foreign Ministry said on Sunday it was working on a response to the sanctions.
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