Russian markets tumbled further Friday after the crash of a Malaysian airliner in strife-torn eastern Ukraine inflamed tensions between the Kremlin and the West.
The disaster that killed 298 people came after Washington and Brussels introduced biting new sanctions against Moscow, with the United States targeting firms in the military, energy and finance sectors.
"The plane catastrophe was a real shock for those investors who had started to believe that it was all about de-escalation," said Slava Smolyaninov, chief strategist at Uralsib Capital.
"For the market, it really was a bad confluence of events with the US sanctions in the morning and the plane tragedy in the evening. Unsurprisingly, investors are taking money off the table in view of higher risks," he told AFP in emailed comments.
In Moscow, the ruble-denominated Micex stock index fell by 1.98 percent in intraday trades, and the dollar-based RTS index was down 2.38 percent.
The ruble was trading at 35.01 to the dollar and to 47.4 to the euro after plunging in reaction to the disaster, which might have been caused by a sophisticated Russian ground-air missile.
Shares in flagship Russian airline Aeroflot fell by 2.72 percent to 54.60 rubles after the company restricted some of its flights to Ukraine.
Shares in state oil giant Rosneft, one of the main targets of new sanctions aimed at curbing Russian support for separatists in Ukraine, lost 1.11 percent to 231.11 rubles.
The ratings agency Fitch said Friday in a statement that the sanctions against Russian companies would not cause their ratings to be lowered.
But news of a new round of Western measures had already triggered a sharp fall in Russian markets on Thursday, with shares in two energy giants targeted by punitive measures, state oil firm Rosneft and private company Novatek, pummelled in particular.
Subsequently, "news of the Malaysian airline crash sent geopolitical tension to a new level," Sberbank CIB said.
"The international spotlight has returned to Moscow's role in backing the separatists, " the London-based Capital Economics consultancy said in a research note.
"The pressure for a tougher line only seems likely to increase... This may weigh further on Russian equities and could revive fears of a tit-for-tat exchange of trade measures that could undermine the increasingly fragile economic recovery in the euro-zone."
The crash shocked the world and triggered a fierce blame game, with Russia and Ukraine pointing fingers at one another and analysts warning that punitive measures against Russia could be taken to a higher level.
The UN Security Council meeting was to hold an emergency meeting later on Friday.
"Apart from the fall-out from the air crash, the major short- to medium-term risks are linked to currency, i.e. a weak ruble leads to higher inflation and higher capital flight, plus the real risk of a shortage of domestic bank lending for small and medium sized enterprises as well as to consumers," wrote Macro Advisory partner Chris Weafer.