Russia is considering using money from its $32bn national wealth fund and from pension reserves to support financial markets, Alexei Kudrin, finance minister, said on Thursday.

His comments indicate the government is under pressure to react to the collapsing stock market. It has tumbled almost 50 per cent since May and lost an additional 2.7 per cent on Thursday.

"There are several proposals now for the banking community to improve the instruments that would allow [markets] to calmly work in this environment," the minister told reporters. "Among these there is a proposal to place pension fund money and national wealth fund money on the domestic market."

Mr Kudrin added the money would be placed in securities.

Sberbank, Russia's largest bank, led the way down on Thursday with a fall of 7.4 per cent - signalling that instability in the financial sector is the key source of weakness.

"There is a shortage of liquidity being felt, and the central bank of Russia is carrying out large-scale operations to refinance commercial banks," said Sergei Ignatiev, chairman of the central bank.

Continued at Financial Times