August 13, 2007 (LPAC)--The capitalization of the Russian stock market decreased by 3.34%, or by $36.552 billion, in one day last Friday. The Russian MICEX index was down 2.6 percent to 1632, and the RTS index fell 2.85 to 1883. The biggest loser was Sberbank, with its stock tumbling 3.63%, according to Interfax. Analysts blamed the decline squarely on US subprime mortgage market problems, as liquidity in the investment departments of a number of large European banks began declining sharply last Thursday, triggering a sell-off on European markets. Across Europe, Asia, and even South America, indexes were down 2-3% overall.

Western analysts were nervous, one of whom indicated that if the (dollar denominated) RTS index continued to fall, "the index could [quickly] sink to 1500," although he nervously added that, "I don't expect it," since the collapse of the US mortgage market has "reached its peak(!)"

The $284 billion cumulative intervention of the European Central Bank seems to have done the job on Monday, with shares "sharply" higher. Many attributed Friday's losses to a "lessening appetite for risk," but a more probable cause is a retrenchment in the US and Europe, as traders pulled in speculative funds to cover losses closer to home