ICELAND'S blue chip stocks plunged 76 percent when trading reopened yesterday after a near week-long suspension and an official delegation from the island sought Russian help in saving the economy from collapse.
Iceland has already tapped the International Monetary Fund for help to ease the crisis that has overwhelmed its once flourishing financial sector and brought its economy close to collapse.
Iceland's entire stock market had been suspended since Thursday with the last official trade coming on Wednesday. The blue chip index tumbled although trading in six financial stocks ?? Kaupthing, Landsbanki, Glitnir, Straumur-Burdaras, Reykjavik Savings Bank (SPRON) and Exista - remained suspended.
Iceland last week took control of the operations of Kaupthing, Landsbanki and Glitnir and has been forced to abandon attempts to defend its free-falling currency.
Icelandic officials arrived in Moscow on Monday seeking funding from oil-rich Russia, and are expected to hold talks with Russian Finance Ministry officials.
However, the official delegation list does not include any ministers or the central bank chief.
Iceland initially mentioned a 4 billion euro (US$5.45 billion) loan - around 1 percent of Russia's gold and forex reserves. Russian officials say no details have been agreed, although they are looking on the loan request favorably.
IMF yet to decide
On Monday, an IMF official who asked not to be identified, said the fund's executive board discussed Iceland's official request for finance at the weekend but that no amount had been agreed.
In Moscow, Russia's Finance Ministry said that Iceland would lay out its wishes at the first round of talks, and if agreement is reached another round of negotiations is likely to follow, at a higher level.
Moscow has already unveiled a rescue package for the Russian market worth over US$210 billion, but analysts say capital flight may not stop until global financial markets stabilize. Helping Iceland could be a small way of making that happen, though Russia's move is widely seen as politically motivated.
Iceland's crown currency was essentially untradeable yesterday and its value was impossible to calculate.