Russian Markets Drop by 4% in 7th Straight Day of Losses

Russian stocks sank for a seventh day on concern that a weakening economic outlook in the United States will hurt demand for metals and energy. Oil producers Surgutneftegaz and Tatneft led the declines as crude dropped below $88 per barrel.

The ruble-denominated MICEX fell 4 percent to 1,570.90 as all but one of its 30 stocks retreated. The index has dropped 20 percent from its Dec. 12 high, a magnitude that constitutes a bear market by common definition. The dollar-denominated RTS slipped 3.9 percent to 1,890.88.

Crude prices fell as low as $88 per barrel in New York on concerns that economic growth in the world's biggest energy consumer may slow.

"The [U.S. Fed] rate cut has simply come too late" for most investors, said Chris Weafer, chief strategist at UralSib. At the same time, "growth worries" are hurting oil prices, he said.

No. 4 oil producer Surgutneftegaz fell 4.8 percent to 22.61 rubles on the MICEX. Tatarstan-based Tatneft slipped 5.7 percent to 117.70 rubles.

LSR Group, a Russian developer and construction company that went public in November, climbed 11 percent to $12.25 at 3:17 p.m. in London trading. UralSib initiated coverage of the stock with a "buy" recommendation and a price estimate of $17.10, saying the vertically integrated developer was worth about $8 billion.

Rosneft dropped 5 percent to 178.39 rubles. Russia's biggest oil producer is seeking $2 billion in loans from Deutsche Bank AG and Societe Generale SA to refinance debt used to buy the assets of Yukos, two people involved in the deal said.