A pair of popular ways to gain exposure to the Russian stock market were on track for their worst daily declines in about two years, with Moscow set to deploy military troops inside Ukraine’s internationally recognized borders.
Russian President Vladimir Putin on Monday ordered troops into the self-proclaimed republics of Donetsk and Luhansk, after saying that he acknowledged the independence of the pro-Russian population in the Donbas region of eastern Ukraine.
Related: Russia moves to secure hold on Ukraine’s rebel regions
Russian troops massed on Ukraine’s borders, including on the territory of neighboring Ukraine, are estimated to have reached some 190,000.
Although Russia has described the troop deployment as a “peacekeeping” effort to ease tensions between Ukrainian forces and the Moscow-friendly population of the Donetsk and Luhansk regions, Western nations are viewing the military action as an act of war.
The U.S. has described Russia’s deployment as “the beginning of an invasion” as it prepared to announce new sanctions against the country.
President Joe Biden has restricted American business in the Russia-backed breakaway regions, and there is a separate raft of sanctions that Washington and NATO allies soon could deploy if the situation escalates.
Check out: Here are the U.S. sanctions Russia could face
The popular VanEck Russia ETF
RSX,
was down more than 11% on Tuesday, and the smaller iShares MSCI Russia ETF
ERUS,
also was registering a double-digit decline, down 12%, setting up for the sharpest single-day drop for both the exchange-traded funds since 2020, FactSet data show.
The drop for the ETFs comes as global markets were broadly slumping, with the Dow Jones Industrial Average
DJIA,
the S&P 500
SPX,
and the Nasdaq Composite
COMP,
indexes all trading sharply lower on the session.
