Russia's ruble had its biggest daily decline over three years, and shares in large Russian companies also fell when investors reacted to a new round of US sanctions targeted at some of Russia's largest tycoons.
Sanctions announced Friday, goal officials and business people around President Vladimir Putin in response to alleged Russian interference in 2016 US elections.
Their influence could threaten Russia's fragile economic recovery, which just began to address a wave of sanctions introduced in response to Russia's annexation of the Crimea in 2014.
Russia's currency fell sharply more than four per cent. on Monday before it recovered slightly to trade of $ 60.31, down 3.67%, the biggest daily percentage decline since January 2015.
Shares in Russia's two largest banks, Sberbank and VTB decreased 17.3 and 9.1 percent. State-owned Sberbank is traditionally seen as a barometer for the wider health of the Russian economy.
In the stock markets, the Russian aluminum magazine Oleg Deripaska saw the stock price of one of his companies half past six years, with the signing of six other so-called "oligarchs" sanctioned with their companies and 17 political figures.
The dollar-denominated RTS index was 11.2 percent, and the ruble-based MOEX-Russian index fell by 7.7 percent – to their lowest level since September November respectively.
United Company Rusal Plc, located in the heart of Deripaca's global aluminum estate, saw the price of its shares listed in Hong Kong dropped over 50 per cent.
Rusal said the effect of sanctions could trigger technical default values on some of its debts. Its dollar denominated bonds fell heavily on standard fears, while its listed shares in Moscow fell 27.7%.
The sanctions mean that Russian companies face losing access to the US market, accounting for about 14%. Of Rusale's turnover last year, according to analysts at Promsvyazbank.
But Russian companies may also be in trouble in other markets as investment partners pull out to reduce exposure.
Swiss engineering company Sulzer has decided to buy back five million own shares from Renova Group reduces Renova's inventory to below 49 per cent. Viktor Vekselberg, Russian President of Renova, was included in the sanction list on Friday.
Although the Russian gas giant Gazprom was not sanctioned, Alexei Miller, its CEO, was admitted to the US list. This could create complicated legal dilemmas for Gazprom's many foreign partner companies.
Russian Prime Minister Dmitry Medvedev Monday ordered his government to prepare measures to support sanctioned Russian units and to draft possible retaliatory measures.
Russia, however, finds It is difficult to respond in shape by imposing sanctions on US companies because few of them have significant Russian exposure.
Russian companies that are not under penalty will also take a hit. The steel mill Evraz was the biggest drop on FTSE 100 Monday, down eight percent, while gold producer Polyus saw a $ 2023 dollar bond pipeline low.
Russia's government bond bonds fell over the curve with its September 2043 Eurobond drops to a five-day low.
The cost of hedging exposure to Russian debt also rose Monday to its highest since mid-December, IHS Markit data showed.