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. Last Updated: 07/27/2016

Market Slips Back To Crisis-Day Level

The Russian stock market slid a further 6 percent Tuesday, almost hitting its "Black Tuesday" level of two weeks ago.

The dismal performance followed a drop of 7.10 percent Monday and left depressed traders divided over whether the market had bottomed out or if worse is yet to come.

The Moscow Times Index of 50 leading shares closed at 289.97 on Tuesday, slumping 6.06 percent on the day. The figure is only a fraction higher than the 289.36 the index recorded Oct. 28, when Russia felt the shock waves of a worldwide market collapse.

Oil giant LUKoil closed at about $19.6, down 5 percent Tuesday, and Unified Energy Systems slipped to $0.2870, down 6 percent.

The volumes on the Russian Trading System dropped from $87.5 million on Monday to $51.4 million.

Traders attributed the fall in volume partly to lack of interest from Russian banks, which they said may have gone to the treasury bill, or GKO, market. GKO yields on average surged Monday from about 21 percent to 27 percent.

"We strongly felt [the Russian banks'] absence today," said Mikhail Koltsov, a trader at Renaissance Capital. "Before yesterday's events they bought pretty aggressively and gave good support to the market."

Valery Levit, a trader at Rinaco Plus, said the situation on the market is "still too far from healthy."

He predicted the market had hit its bottom, making buying an attractive option.

"The bottom is very close. Sellers are exhausted," Levit said. "I saw some Western buying emerging. It is possible they are closing short positions, which means they consider the market is close to the floor."

He warned that when the market recovers, it may do so sharply and that investors who do not to start buying now may miss an opportunity to buy cheaply.

"Buying levels are very attractive now," Levit said. "A fast 10 percent correction may happen any time."

But Mikhail Koltsov was much less optimistic. "I would not be surprised if the market goes down further," he said. "Long term investors have still not taken part in the game." Although their entry into the latest sell-off spree appears unlikely, he said, it would certainly drive down the market dramatically.