Russian Markets Collapse

Russian stock markets experienced another stark collapse Friday, dropping to new lows amid plummeting oil prices and fears of a global recession. At close, the RTS index lost 13.68 percent, closing at 549.93. The index had ceased trading for one hour at 13:10, cancelled trading for shares of Sberbank at 14:30, and finally froze trading altogether at 17:05.
The MICEX, meanwhile, halted trading at 14:10 after losing 14.24 percent, closing at 513.62. The two indexes have lost over half their value in the past month alone. Both will resume trading on Tuesday, October 28th.
The Russian collapse comes in line with falling share prices in Europe, although the reaction in Russia has been much more severe. Fears of a global recession and oil prices at a 16 month low have made many investors fearful about the state of Russia’s oil and gas-rich economy. On Thursday, the Standard & Poor’s rating agency lowered Russia's long-term outlook to “negative” from “stable.”
Crude oil was trading at $63 per barrel on the New York exchange Friday. This posed a serious problem for Russia’s 2009 budget, which will go into deficit below a price of $70 per barrel.
To combat sinking prices, the OPEC cartel announced today that it would cut production by 1.5 million barrels a day. Unfortunately, many investors do not believe the move will be enough to counteract shrinking worldwide demand, and the cut did not have an immediate effect on markets.