Oct. 17 (Bloomberg) -- Russian stocks fell, led by OAO Gazprom, after Finance Alexei Kudrin predicted further declines for the country's equities market because of the global credit crisis.

The ruble-denominated Micex Index sank 4.3 percent to 599.64, the lowest since May 2005, after earlier advancing as much as 6.4 percent. The dollar-denominated RTS Index fell 6.5 percent to 667.62, bringing its retreat in the past five days to 21 percent for a ninth consecutive week of losses.

Kudrin said he sees further declines in Russian stocks because of the risks to world markets. The Micex has lost 68 percent of its value this year as crude oil prices slid and Russian companies and billionaires faced calls from their banks for more collateral on loans backed by company shares.

``Margin calls among Russian second- and third-tier companies are still a major problem for the market, and they won't go away until the leverage has been erased completely,'' said Julian Rimmer, head of sales trading at UralSib Financial Corp. in London. ``There are still lots of loans out there collateralized by positions in smaller stocks.''

Gazprom, Russia's biggest publicly traded company, slipped 1.9 rubles, or 1.8 percent, to 102.97 rubles, after earlier rising as much as 8.7 percent. The company's market value yesterday sank below $100 billion.

``The intraday volatility is so high and markets are so nervous that the direction can changes several times a day,'' said Marina Akopian, manager of the Hexam EMEA Absolute Return Fund in London. ``Overall, Russia is a screaming buy, so once liquidity improves we will see a big rally.''

Uralkali

OAO Novolipetsk Steel, Russian billionaire Vladimir Lisin's steelmaker, plunged 18 percent tot 21.45 rubles.

OAO Uralkali, Russia's second-largest potash producer, lost 16 percent tot 99.17 rubles. The company said the ``ground crack'' from a flooded mine in central Russia is approaching a railroad serving shipments from competitor OAO Silvinit.

AFK Sistema dropped 2 rubles, or 20 percent, to 8.059 rubles on the Micex. Moody's Investors Service late yesterday put the credit rating of billionaire Vladimir Yevtushenkov's holding company ``on review for possible downgrade,'' citing the Russian real-estate market.

Sistema-Hals, Yevtushkenov's property unit, yesterday said it has $1.2 billion in debt and is reviewing investment plans because of the financial crisis.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net.

Last Updated: October 17, 2008 12:08 EDT