The plunge is all the more remarkable because many foreign investors, who drive the market here, have been grumbling for years about the same problems of pervasive corruption, judicial fraud and political stasis that angered the protesters.
Instead, investors have focused on the short-term instability, even if the goals of the protesters are in line with those of investors.
“There are cracks appearing in the facade,” Bruce Bower, a portfolio manager at Verno Capital in Moscow, said in a telephone interview.
Fitch, the ratings agency, has said that Prime Minister Vladimir V. Putin will almost certainly be elected president in March, despite the protests.
But the agency cautioned about the possibility of a rise in public sector spending to sooth tempers. The government has already announced large salary increases for police and military officers. This could send ripples to already fragile European neighbors, who are looking to Russia for help with their sovereign debt troubles.
President Dmitri A. Medvedev last week offered to contribute up to $20 billion to an International Monetary Fund package to help stabilize the euro.
The president’s economic aide, Arkady V. Dvorkovich, said Russia might extend a $10 billion loan to the I.M.F. that was due to be reimbursed, and contribute another $10 billion if clearer plans emerged for financing a firewall for vulnerable euro zone nations like Italy and Spain.
Russia’s announcement helped to buoy European markets last week, though the sum was modest compared with the hundreds of billions of dollars in standby reserves that many economists say will be necessary to maintain investor confidence in the euro.
If the domestic turmoil were to crimp Russia’s ability to deliver on the pledge, it would prove a setback.
Along with politics, political risk has returned to Russia, and the outlook for change — unheard-of only a few months ago — has become a part of the calculus of investment.
Russian share prices peaked the day after parliamentary elections on Dec. 4, when the ruling party won as expected, though with only a small majority, and tumbled as the protests began. The Micex market slumped 11 percent to a trough on Dec. 12, compared with an average 6 percent decline for other emerging markets, according to Aton, a Moscow brokerage.
The protests have emerged in strange parallel with high oil prices and an economy that is still growing.
Andrew Risk, an equity strategist at Aton, said the street protests in Moscow were compelling businesses to “ask questions that never really occurred to them before,” including assessing the chances of instability and how it would affect companies.
In recent Russian economic history, economic and political change moved in tandem, starting with the arrival of both capitalism and democracy with the fall of the Soviet Union. The increasing reliance on the police and security under Mr. Putin coincided with a partial nationalization of industry.
Today, economists see the biggest hurdles for Russia’s economy as diversifying away from dependence on oil and promoting high technology and small and medium businesses to cushion downturns in commodity prices — reforms that many of the urban protesters would also surely welcome.
“If they are under more pressure from the population to open up and understand the severity of the tasks ahead, then the potential is immense,” Mr. Risk said.
Russia’s 30-stock Micex benchmark index fell faster than any of the 21 major emerging market indexes tracked by Bloomberg news after the election. Russian publicly traded companies are now also, on average, the cheapest of any in the emerging markets.
For example, Gazprom, the state gas monopoly, trades for 3.1 times estimated earnings, a pittance, particularly in light of the company’s vast, untapped natural gas reserves, the world’s largest.
Some investors are seeing a buying opportunity in the protests. Per Brilioth, the managing director of Vostok Nafta, a Swedish fund that invests in Russia, said the demonstrations were unlikely to unseat Mr. Putin and the market would rebound.
“You can like what’s happening, or you can disapprove, but the politics are stable,” he said. “I was very bullish from the outset to invest into worry in the election cycle.”
The picture of a country with underlying woes despite the high price of oil that had for many years been sufficient to keep the economy and government afloat was already emerging this year as investors began pulling money out of Russia. The government has estimated about $70 billion will leave Russia in capital flight this year. Partly, the outflow reflected loans called in by European banks.
Moscow bankers’ renewed focus on political risk was seen at the opposition rally last week.
Sergei Khlystov, 34, who said he worked in finance, showed up at the huge pro-democracy protest on Dec. 10 smartly dressed in a necktie and dark overcoat, carrying an attaché case. Mr. Khlystov was not there to upend the government of Mr. Putin but to gauge the impact of political developments on business.
“I wanted to see with my own eyes what is going on here,” he said. The Russian markets had swooned the day before. “It may be connected with this, and I came to see what is going on.” His conclusion? Many in the crowd, he said, were there “just to hang out” and would pose no serious challenge to Mr. Putin.
“You know, for something to change, there should be many more people.”
Another demonstration, planned for Saturday, seems likely to clarify whether the movement will persist, or taper off during the holidays.
David Herszenhorn contributed reporting.
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