Russia stocks tumble as oil falls, rouble at 2-yr low

By Polina Vorobieva and Dmitry Zhdannikov

MOSCOW (Reuters) - Russia's stock market lost over a tenth of its value on Friday, hitting its lowest levels since late 2004 as a further oil price fall cast fresh doubts over Russia's ability to avoid a recession and defend its currency.

The rouble slid a further 23 kopecks to 27.23 rouble per dollar, touching a two-year low, as the U.S. currency rallied on global markets prompting the central bank to sell another $1 billion (640 million pounds) to $2 billion to support the rouble.

"What we see is a huge liquidation. Liquidation of positions with big leverage, of those clients who used shares as collateral," said Timur Nasardinov from Troika Dialog.

"There is a global liquidation. But our Russian liquidity situation is much worse," he said.

Russia's benchmark RTS index fell more than 10 percent, while the more liquid MICEX bourse fell 14.2 percent before being suspended by the regulator until Tuesday.

Investors regularly complain about Russia's erratic trading hours and a drift in trading volumes to London, where most of Russia's more liquid shares are traded. The Russian index for London-listed shares fell 16.5 percent by 11:40 a.m. British time.

"It will most likely be a bad day in the U.S. today and on Monday in Asia. So the exchange will be shut on Monday," said Maxim Gulevich from UBS.

Nasardinov said the suspension will only cause further damage. "The situation with liquidity will be even worse: there will be sales abroad and no purchases here."