Rouble hits new low as Ukraine crisis deepens

MOSCOW: The rouble hit a record low against the dollar on Monday and Moscow shares fell after Europe and the United States accused Russia of direct military involvement in the war in Ukraine, with weak economic data from China adding to concerns.

At 0835 GMT, the rouble was 0.9 percent weaker against the dollar at 37.44. It also lost 0.9 percent to 49.20 versus the euro and 0.9 percent to 42.72 against its dollar-euro basket.

Russian stocks fell as the weakening rouble dragged down the dollar-based RTS index. Data also showed that growth in China's vast factory sector, a major importer of Russia's raw materials, slackened in August.

Moscow indexes and the rouble had plunged last week as the West accused Russia of deploying troops in Ukraine, and threatened new sanctions.

"In our view, the rouble looks tactically oversold, since we think the lion's share of Friday's positioning was driven by the consideration of risk management with concerns that additional sanctions might be imposed on Russia by the EU and the US," analysts at VTB Capital wrote in a note.

"If that does not happen in the near term (or they are softer than anticipated), we think the rouble could regain 1-2 percent against the EM FX index."

The RTS share index was down 1.1 percent to 1,177 points, while the rouble-based MICEX index was down 0.2 percent to 1,398 points.

Data showing Russia's manufacturing sector held steady last month failed to spur optimism about the economy.

"Investors will be looking forward to the services survey to be published (on Wednesday) to provide a more complete picture of the Russian economic dynamics in these turbulent times," said Slava Smolyaninov, an analyst at Uralsib, in a note.

Global depository receipts (GDRs) of Russia's Ros Agro PLC , a holding company of meat producer Rusagro, were down 0.7 percent in London after the company said it plans a GDR listing in Moscow and a share listing in Cyprus by the end of 2014.

Cyprus-registered Ros Agro together with Cherkizovo are Russia's largest meat producers.