Market Fall Eases Up On Day 3

The MICEX Index sank to the lowest since January 2006, dropping 3.7 percent to 1,073.02 at the close in Moscow. The dollar-denominated RTS retreated 2.7 percent to 1,298.08.

Among the big losers were the two largest state banks. Shares of banks and brokers declined around the world as four analysts lowered their recommendations for Lehman Brothers Holdings, citing concern the firm's credit rating may be cut.

VTB Group, the country's second-biggest bank, plunged 0.32 kopeks, or 6 percent, to a record low of 5.02 kopeks. Sberbank dropped 2.11 rubles, or 4.5 percent, to 45.34 rubles.

The telecoms sector managed to break the trend, however, with the MICEX Telecoms Index finishing the day up 2.2 percent.

Uralsvyazinform added 3.1 kopeks, or 6.1 percent, to 54.2 kopeks, its first gain in seven days, as investors snapped up stocks at cheaper valuations following the biggest two-day decline in the RTS Index in seven years.

"The valuations at the moment are ridiculously low by any methodology," said Philip Townsend, head of research at Metropol. The country's regional telephone companies are trading at about one-third the price-to-earnings ratios of their peers in Western Europe, he said.

Aeroflot snapped a five-day drop, climbing 2 rubles, or 3.4 percent, to 61.50 rubles as crude oil fell for a third day in New York, trading near $100 a barrel.