Russia's benchmark stock indexes dropped more than 4 percent Friday in a second day of steep falls as investors fretted over the global economic outlook and Europe's debt crisis.
Friday's losses, though dramatic, were not as steep as the plunges the day before, when the ruble-denominated MICEX index dropped 7.8 percent, its biggest single-day loss in two years, and the dollar-denominated RTS fell 8.6 percent.
The MICEX benchmark settled 4.5 percent lower Friday, at 1,327.2 points, its weakest since August 2009. That means it's lost 14 percent just this week. The RTS index, meanwhile, lost 5.2 percent.
Stock markets around the world also fell Friday, but not as much as Russia's, which has been hit particularly hard as investors flee emerging markets, especially if a new recession in the United States or Europe hits demand for energy and other commodities.
President Dmitry Medvedev said Friday he would summon a meeting to discuss the worsening situation on world markets.
"The situation is not straightforward, and we must behave very carefully," Medvedev was quoting by the RIA Novosti as saying.
A similar market plunge was seen in other emerging Eastern European economies, with the Czech Republic's benchmark Prague Stock Exchange index down 5.2 percent and Poland's WSE index 2.7 percent lower.
The Russian ruble, pressured by the ongoing capital flight, also extended its fall Friday, shedding 0.5 percent against the U.S. dollar to settle at 32.2 rubles, its weakest level since August 2009.
Oleg Achkasov, head of equity trading at Moscow-based VTB Capital investment group, said the slide in Russia did not necessarily highlight weakness in the domestic economy.
"There are no real fundamentals behind this, it is a just a panic sell-off with everybody getting their cash out of emerging markets," Achkasov said.
Achkasov said the kind of investors that Moscow's markets attract is another contributing factor to the steepness in this week's slide.
"A large role has been played by the fact that the Russian market has traded in a lot of institutional money this year, more than most other emerging markets, so their withdrawal from the market has taken its toll on shares," he said.
The Russian economy's ever-growing reliance on oil exports means long-term downturns in energy prices will always have to potential to unnerve jittery investors.
"Back in 2008, Russia needed $50 (per barrel) to balance its books," said Ivan Tchakarov, chief economist at Moscow-based investment bank Renaissance Capital. "Now, it needs $120 to balance its fiscal books, which means that the vulnerability of the Russian economy to lower oil prices is actually bigger now than it was three years ago."
Economic Development Minister Elvira Nabiullina on Friday reassured investors that financial authorities are taking "necessary measures" to offset the slump on the markets.
VTB Capital's Achkasov commended the Russian Central Bank on its policy of trying to inject liquidity into the market.
"It is clear that the authorities are helping out as much as they can, but obviously unless the Russian government ever considers buying shares from the market again, there is only so much they can do," he said.
Nataliya Vasilyeva contributed to this report from Moscow.