Russia's RTS Index fell to the lowest level since 2006, the ruble extended its drop and the cost of protecting the country's bonds rose as the government recognized the independence of Georgia's breakaway regions.

The RTS index of 48 companies posted the biggest decline among 89 global equity measures tracked by Bloomberg, while Russia's currency slid to the lowest level in almost seven months against the dollar. Credit-default swaps on Russian debt climbed 7 basis points, according to CMA Datavision prices in London, as President Dmitry Medvedev risked a deepening rift with the West by recognizing South Ossetia and Abkhazia.

Investors have pushed the RTS to this quarter's steepest retreat among the world's stock markets as Russia invaded Georgia and tumbling oil prices sent energy producers lower. Medvedev's statement followed a unanimous call by Russia's parliament to back the enclaves' aspirations for statehood in the aftermath of a five-day war that began on Aug. 8.

Continued at Bloomberg