A pair of popular ways to get exposure to the Russia stock market was on track for their worst daily decline in about two years, as Moscow deployed as many as 190,000 troops along Ukraine’s 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 faction in the Ukrainian region of Donbas.
Related: Russia moves to secure hold on Ukraine’s rebel regions
Although Russia has described the troop deployment as a “peacekeeping” effort to ease tensions between Ukrainian forces and the Moscow-friendly 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 Ukraine’s Russia-backed breakaway regions, and there are a separate raft of sanctions for Russia that it soon could deploy if the situation escalates.
Check out: Here are the U.S. sanctions Russia could face
The popular VanEck Russia ETF
was down more than 11% on Tuesday and the smaller iShares MSCI Russia ETF
also was seeing double-digit declines, 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
the S&P 500
and the Nasdaq Composite
indexes all trading sharply lower on the session.