Russian stocks fell on Friday after heightened debt-risk downgrades and an announcement by the U.S. that it would impose tougher sanctions.
President Barack Obama announced a new round of strictures on Bank Rossiya and 20 Russian individuals on Thursday. The U.S. described Bank Rossiya as a personal bank for senior officials in Russia, the Wall Street Journal reports.
The move, which freezes assets held in the U.S. and prevents Americans from doing business with the listed companies, prompted multiple ratings services to downgrade Russia's sovereign rating from stable to negative.
"It makes sense that both Russia and the West will slowly but surely escalate sanctions, but nobody wants it to get to the point where this would seriously disrupt markets," David Lebovitz, a global market strategist at J.P. Morgan Asset Management, said, according to the Wall Street Journal.
Russia's Micex stock index fell by more than 3 percent on Friday as a result of the news. The RTS Index dropped more than four percent in early trading.
Paul McNamara, an emerging debt portfolio manager at GAM, said that Russia was a sickly economy prior to the situation in Ukraine and that everything that has happened since the situation with Crimea has been negative, the Wall Street Journal reports.
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