Stocks Take Steepest Fall in Months

Stocks fell sharply on Wednesday amid a global flight from risk, and the RTS index saw its worst daily losses since May 2006, dropping 4.52 percent.

Analysts blamed the turmoil on U.S. markets, which are reeling this week from Citigroup's massive write-down of subprime debt and from poor U.S. retail data.

"We've entered a period of spectacular turbulence in the world economy. Everyone's nerves are at their limits," said Kirill Dmitriyev of Delta Capital.

The most liquid stocks fared worst, as indiscriminate traders sold whatever they could.

On the MICEX exchange, Sberbank shed 4.58 percent, while fixed-line operator Uralsvyazinform dropped 5.93 percent, and gas producer Novatek became the biggest loser, down 7.81 percent.

The MICEX fell 4.29 percent for the day.

Investors seemed to ignore record earnings from Rosneft, which fell more than 4 percent in line with its peers.

Utilities stocks held up best, with the sector's bellwether, Unified Energy System, down a moderate 1.57 percent.

"I wouldn't put too much into the sectoral differences today. What we're seeing is really a risk reaction. They're selling everything," said James Beadle of Pilgrim Asset Management.

Investors and analysts agreed the sell-off in equities had not run its course.

The best chance to break out of the rut will be the Jan. 29 to 30 meeting of the U.S. Federal Reserve, which may cut interest rates by up to 75 basis points.

"But until we can get some kind of really good news out there, I think the risks are skewed firmly to the downside," said Erik DePoy, strategist at Alfa Bank.