Russian stock markets fell following the news that Turkey had shot down a Russian warplane near the Syrian border.
The RTS index tumbled by as much as four percent, prompted by Gazprom which reportedly relies on Turkey for around a sixth of its natural gas exports outside the Commonwealth of Independent States.
Most stocks fell on the benchmark Micex Index in Moscow and the bond market also saw sell-offs.
There are fears that an escalation of tension in the region may threaten trade relations.
But one analyst said a complete breakdown of ties was in neither side’s interest.
Russia is Turkey’s second biggest trading partner.
Turkish markets also declined. The Borsa Istanbul 100 Index saw its biggest fall in nearly two months.
The lira fell as much as one percent against the dollar.
Other European markets also declined, typically by up to one and a half percent.
Again it led to warnings of short-term turbulence, but analysts think markets can take it in their stride in the belief that neither side wants to see the situation escalate.