The Russian stock market erased all its gains made this year and fell to levels of late 2012 Friday, dragged down by declining oil prices and continuing outflows from Russia-dedicated funds. The ruble-based Micex index was down 0.68% at 1475.89 points at 1148 GMT after falling briefly to 1466.84, its lowest level since Dec. 25, 2012
The Russian stock market erased all its gains made this year and fell to levels of late 2012 Friday, dragged down by declining oil prices and continuing outflows from Russia-dedicated funds.

The ruble-based Micex index was down 0.68% at 1475.89 points at 1148 GMT after falling briefly to 1466.84, its lowest level since Dec. 25, 2012.

"The downside trend formed two weeks ago. The global market has turned into downside correction after touching new highs and the Russian market has followed oil prices," said Geldy Soyunov, chief analyst at Alfabank.

Prices for Brent crude, one of the most influential drivers of the Russian market, dropped below $110 per barrel Friday from levels of around $118 in mid February.

Data from China, which showed the manufacturing sector expanded at a slower pace than expected, also took its toll on global commodity and metal prices, bruising Russia's blue chips. Shares in OAO Gazprom (GAZP.RS) dropped 2%, the country's largest oil producer OAO Rosneft (ROSN.RS) was down 1%.

On concerns about U.S. debt issues, funds are leaving the emerging markets, data from EPFR Global showed. In the week to Feb. 27, Russia-dedicated investment funds have reported net outflows of $65 million, bringing the year-to-date figure to $212 million.

"This week's data indicates that investors are becoming increasingly wary of their positive stance towards emerging markets. This increases the risks of higher outflows over the next few weeks, which puts at risk the market gains achieved in the past three months," analysts at Uralsib Capital said in a note.

Intraday volatility in declines on the Micex along with technical analysis indicators suggest that the index could soon drop towards 1425 points, analysts at RosEuroBank said.