Nov. 27 (Bloomberg) -- Russia’s Micex Index of stocks fell for a fourth day as concern about a possible default by Dubai curbed appetite for riskier assets and oil dropped.

OAO Sberbank, Russia’s biggest bank, Federal Grid Co., the state monopoly for high-voltage power transmission, and OAO Gazprom led the benchmark Micex down as much 4.1 percent to 1,217.12, for a decrease of 11.4 percent from an Oct. 21 high. The gauge was 1.9 percent lower at 1,245.49 as of 12:28 p.m. in Moscow. A slide of 10 percent or more from a high is referred to as a “correction.”

The ruble fell as much as 2.3 percent against the dollar, the biggest intraday drop since Aug. 17.

“There was a growing sense that there would be a new, big correction on emerging markets,” said Alexei Moiseev, managing director of Renaissance Capital in Moscow by telephone. For Ukraine, “there were expectations of a default on Monday, and now there is Dubai.” Ukrzaliznytsya, Ukraine’s state rail company that missed a principal payment on a syndicated loan this month, was offering repayment over three years, Dragon Capital, the country’s largest brokerage, said Nov. 23.

Russian Finance Minister Alexei Kudrin said Nov. 25 that the nation’s stock market, which has more than doubled this year, is “overheated” and forecast oil prices will decline in 2010. The country’s dollar-based RTS Index is the best performer in 2009 among 90 equity gauges worldwide tracked by Bloomberg. Today’s drop pushed the ruble-based Micex from second to third place.

Risk

“Funds have had a good year and the year literally ends in a week,” Moiseev said. “Many are using this chance to close the year well. No one wants to take risk.”

Oil fell to its lowest level in six weeks on concern about Dubai along with signs that the pace of fuel demand recovery in the U.S., the biggest energy-consuming nation, was slowing. Crude oil for January delivery lost $4.92, or 6.3 percent, to $73.06 a barrel on the New York Mercantile Exchange.

Energy products make up about 70 percent of Russia’s export revenue.

Sberbank retreated 3.7 percent to 64.58 rubles, Federal Grid slid 4.2 percent to 34 kopeks, gas producer Gazrpom slumped 2.7 percent to 162.75 and its oil arm, OAO Gazprom Neft, lost 2.2 percent to 151.69 rubles.

The ruble last traded down 1.8 percent at 29.7097 per dollar.

“The central bank’s goal was for the ruble to be weaker,” Moiseev said. “Essentially Dubai has solved their problems.”

Russia’s central bank will keep cutting interest rates as policy makers try to prevent speculative capital from flowing in and destabilizing the currency, Bank Rossii First Deputy Chairman Alexei Ulyukayev said this week.

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net.

Last Updated: November 27, 2009 05:06 EST