The Market Vectors Russia ETF (NYSEArca: RSX) lost about three-quarters of a percent early in Friday’s after-hours session after Fitch Ratings lowered Russia’s sovereign credit rating to BBB-, the lowest investment grade, with a negative outlook. Fitch previously rated Russian sovereign debt BBB.

‘BBB’ ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity,” according to Fitch.

“The economic outlook has deteriorated significantly since mid-2014 following sharp falls in the oil price and the rouble, coupled with a steep rise in interest rates. Western sanctions first imposed in March 2014 continue to weigh on the economy by blocking Russian banks’ and corporates’ access to external capital markets. Having grown by just 0.6% in 2014, Fitch now expects the economy to contract by 4% in 2015, compared with our previous forecast of minus 1.5%, as steep falls in consumption and investment are only partially offset by an improvement in net exports, driven by a sharp drop in imports. Growth may not return until 2017,” said Fitch in a statement.

RSX, the largest and most heavily traded Russia ETF, fell 3.7% during traditional trading hours Friday, paring its 2015 gain to 4.3%.

There is evidence to suggest traders are still more comfortable with a bearish view of Russian stocks. Over the past month, over $20 million has been pulled from the Direxion Daily Russia Bull 3x Shares (NYSE: RUSL), but the Direxion Daily Russia Bear 3x Shares (NYSEArca: RUSS) has seen modest inflows. [Cash Rush to Leveraged Russia ETFs]

After soaring almost 10% Friday, RUSS jumped another 4% in after-hours trading.

Prior to the Fitch downgrade, speculation was intensifying that Russia was headed for a junk credit rating. On Dec. 23, Standard & Poor’s placed Russia’s sovereign debt on CreditWatch with negative implications, indicating Russia could lost its already tenuous grasp on its investment-grade credit rating.

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