Russian Stocks Plummet in London With Moscow Exchange Shut

(Bloomberg) -- As Russia canceled trading of stocks in Moscow on Monday, London-listed shares of Russian companies cratered after harsher sanctions were imposed on the country following its invasion of Ukraine.

Depositary receipts for Russia's biggest lender Sberbank of Russia PJSC sank 74%, the most on record, while retailer Magnit PJSC slid 80%. Gas giant Gazprom PJSC dropped 53%.

With Russia's central bank deciding to keep the country's trading venue shut today, Russian stocks listed in the U.K. provided a gauge to how shares might react when they eventually resume trading on the local bourse. Among other depositary receipts falling in London, oil producers Lukoil PJSC and Rosneft Oil Co. both slumped at least 40%.

“Russian assets are not attractive for foreign investors at this point in time as Russia's isolation continues to grow, and the local stock market will become even more ‘local' than it was before,” Leonardo Pellandini, a strategist at Bank Julius Baer, said in written comments.

READ: ‘Uninvestable' Russia Is Rattling Global Markets: Traders React

The largest U.S.-listed exchange-traded fund tracking Russian equities, VanEck Russia ETF, lost about a quarter of its value in New York, extending last week's 32% slump. Among single stocks, trading in some U.S.-listed shares of Russian companies was halted after earlier volatility. Internet company Yandex NV fell 21% in premarket before being halted, while trading of depositary receipts in Ozon Holdings Plc was also stopped.

Index provider MSCI Inc. is consulting with clients to understand the implications of sanctions against Russia on markets, Dimitris Melas, the firm's head of index research and chair of its Index Policy Committee, said by phone. While no decisions have yet been made, one possible outcome could be removing Russian stocks from MSCI indexes and making Russia a standalone market, he added.

There is no set time frame on the MSCI decision, and it will depend on whether the market is deemed uninvestable and could take days or weeks or months, Melas said.

A decision to penalize Russia's central bank and exclude some Russian banks from the SWIFT messaging system was announced Saturday in a joint statement by the U.S., European Commission, France, Germany, Italy, U.K. and Canada. The Bank of Russia attempted to counter the measures on Monday, doubling its key interest rate to 20% and imposing some controls on the flow of capital.

President Vladimir Putin today banned all Russian residents from transferring hard currency abroad, including for servicing foreign loan contracts, potentially putting much of the country's $478 billion in external debt at risk of default.