| LONDON, March 5
LONDON, March 5 Russian shares fell again and
the rouble slipped towards record lows on Wednesday as investors
remained wary about a standoff between Russia and Ukraine in
Chinese shares fell as fears grew over a possible default by
a listed company there and on Beijing's plan to introduce
deposit insurance - a move towards freeing up deposit rates -
but the broader benchmark emerging equity index held up.
Ukraine's hryvnia dropped against the dollar while sovereign
dollar bonds stabilised before talks between U.S. Secretary of
State John Kerry and Russian Foreign Minister Sergei Lavrov in
Russian forces remain in control of strategically important
Crimea in the Black Sea peninsula.
"Investors are still nervous and still on the back foot.
Putin has left all his options open," Thu Lan Nguyen, emerging
market strategist at Commerzbank in Frankfurt, said.
"Anything can happen. Investors are worried about an
economic impact if the West were to decide on economic
sanctions," he said, referring to French Foreign Minister
Laurent Fabius' warning about possible EU sanctions on Russia.
The rouble-denominated MICEX index was down 1.5
percent while the dollar-denominated RTS lost 1.6
percent. Both indexes plunged as much as 12 percent on Monday,
before recovering somewhat on Tuesday.
The rouble was down about 0.2 percent versus the dollar and
the euro , having fallen to record euro
lows on Monday.
The central bank said it had spent the equivalent of $11.4
billion - more than 2 percent of its foreign currency reserves -
on Monday supporting the rouble.
Russia has relatively little foreign debt but the balance of
payments position is deteriorating because of capital outflows
and falling oil revenues.
The hryvnia was trading at 9.15 per dollar, having
fallen as low as 11.7 on Monday.
Chinese shares fell 0.9 percent while the
yuan slipped 0.25 percent against the dollar, having
suffered its biggest weekly drop since 1994 last week.
In what would be the country's first domestic bond default,
loss-making Chinese solar equipment producer Chaori Solar
said it will not be able to meet interest payments
on bonds due on Friday.
The decline in shares follows the yuan's dramatic weakening
last week after the central bank let it fall beyond the official
Many thought the move was designed to set the stage for
further foreign exchange reforms as China began its annual
parliamentary meeting on Wednesday.
Premier Li Keqiang said Beijing aims to grow the world's
second-largest economy this year by 7.5 percent, the same target
as set for 2013.
"There's a lot of uncertainty over politics there. The goal
is to liberalise the FX regime and financial markets but the
problem is there's not a lot of transparency," Nguyen said.
"A lot of people expect the yuan to appreciate but it is not
a one-way street."
The MSCI emerging index rose 0.3 percent,
supported by buoyant South East Asian shares.
Qatar's share index fell 2.3 percent after Saudi
Arabia, the United Arab Emirates and Bahrain said they were
withdrawing their ambassadors from Qatar because Doha had not
implemented an agreement among Gulf Arab countries not to
interfere in each others' internal affairs.
The index is on track for the biggest one-day fall since
Zambia's kwacha currency fell as low as 5.93 per dollar
as China's economic slowdown weighs on demand for copper.
Zambia is a major exporter of the metal.
The kwacha has lost more than 6 percent of its value this
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )