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As China softens over trade fears...

Russian stocks plunge following US sanctions

Shares in Russian companies nosedived across global markets after new US sanctions were imposed on the operations of the country’s wealthiest businessmen.

The sell-off spread beyond the seven oligarchs and 14 companies targeted. Moscow’s blue-chip MOEX index down 8.34%, its biggest single-day fall since the imposition of sanctions by the west in 2014 in response to Moscow’s invasion of Crimea.

The rouble fell by 5% against the dollar at one stage, its largest drop since 2016.

Russia also came in for international condemnation over an alleged chemical weapons attack by the Syrian government.

US president Donald Trump, whose war on those he sees as international trading pariahs, has warned of repercussions if the Syrian attack is confirmed.

Companies owned by Russian billionaire Oleg Deripaska were the biggest casualties of Monday’s sell-off, with this Hong Kong listed aluminium producer Rusal losing half its value.

The sell-off in Russian stocks contrasted with a generally more buoyant market mood. The blue chip FTSE 100 ended up 0.15% at 7,194.75, buoyed by financials and industrials.

The sanctions make it almost impossible for these Russian firms and their billionaire owners to transact in US dollars, the main currency used in international trade and the standard denomination for commodities.

The US said it imposed the latest sanctions because of Russian activity in Ukraine, its support of President Bashar al-Assad in Syria’s civil war and for subverting Western democracies.

It has also expelled dozens of Russian diplomats in response to the poisoning of a former Russian spy in Salisbury.

Trade war fears ease

U.S stock futures rallied in afternoon trade and Asian equities bounced as Chinese President Xi Jinping promised to lower import tariffs on products including cars, helping soothe investor jitters over an escalating U.S.-China trade row.

Xi said that China will take measures to widen market access for foreign investors, raise the foreign ownership limit in the automobile sector and protect intellectual property of foreign firms.

His comments prompted a largely positive reaction in financial markets, which have been rattled over the past week on fears that the tit-for-tat tariffs will turn into a full-scale trade war.

Japan’s Nikkei share average was up 1.1%, led by a sharp jump in the transportation sector.

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