* Shares in Aeroflot, Bashneft down 5-6 pct
* Rouble up 0.2 percent against dollar
(Updates shares after the market closing)
MOSCOW, July 18 Russian shares fell 1.3 percent
on Friday, as the downing of a passenger airliner in eastern
Ukraine looked likely to increase tensions with the West,
contributing to the biggest weekly drop since late April.
The rouble-traded MICEX closed down at 1,422.53
points, dropping 5 percent this week, the biggest loss in twelve
weeks. The dollar-denominated RTS fell 1.8 percent to
1,276.80 points on Friday.
News that a Malaysia Airlines plane was brought
down in a part of Ukraine under the control of pro-Russian
separatists came after the market closed on Thursday. The
downward pressure on shares reflected concerns over new
sanctions on Russia over the Ukraine crisis.
Both Russia and Ukraine have denied involvement in the
"The origin of the crash will only be revealed after the
official investigation is finished, but in any case it has
massively increased global attention on what is occurring in the
conflict zone," Sberbank CIB said in a note.
"The vast majority of casualties are Europeans, which may
turn EU public opinion towards introducing additional sanctions
against Russia," it added.
Germany's Angela Merkel challenged Moscow's attempt to pin
the downing of the airliner on Ukraine, pointing to Russia as a
source of separatists' weapons. But she said it was too soon to
talk about retaliatory measures.
The incident happened a day after the United States imposed
new sanctions on Moscow, hitting Russian assets and the rouble.
Shares in state-controlled Aeroflot fell 5.1
percent on Friday. It will no longer fly over Ukraine, an
official at the airline said.
Mid-sized oil producer Bashneft shed 6 percent as
its owner, Sistema, said it faced restrictions on its
share transactions, putting Bashneft's prospects to list shares
in London this year in doubt.
The MSCI global emerging equities index was flat.
The rouble was 0.2 percent higher against dollar at 35.11
. It touched a two-month low early on Friday, but
then was helped by companies buying it for forthcoming tax and
The currency was up 0.4 percent against the euro
This left the rouble up 0.3 percent at 40.66 against the
dollar-euro basket that the central bank uses to guide
the nominal exchange rate.
"If geopolitical tensions increase, there is plenty of room
for the rouble to underperform further," VTB Capital said in a
For rouble poll data see
For Russian equities guide see
For Russian treasury bonds see
Russia in graphics: link.reuters.com/dun63s
(Reporting by Polina Devitt; Additional reporting by Vladimir
Abramov; Editing by Timothy Heritage and Robin Pomeroy)