Protests against Prime Minister Vladimir Putin are compounding concerns over weaker oil and slower global growth that sent Russia’s RTS index to drop the most in the world last week and spur speculation that more declines are likely.

The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, fell 1.1 percent to $27.57 on Dec. 9, bringing its decline in the week to 9 percent, the most since September. Fixed-line phone operator OAO Rostelecom dropped to the lowest level since Oct. 20 in U.S. trading after HSBC Holdings Plc cut its share-price target, while OAO Gazprom, Russia’s biggest company, slid more than 9 percent.

As oil prices fell last week and concern mounted that the debt crisis in Europe would crimp energy demand, anger over the Dec. 4 parliamentary elections sent at least 25,000 people into the streets of Moscow on Dec. 10, the biggest demonstration in Putin’s 12 years in power. The cheapest valuations among emerging markets may not be enough to revive demand for Russian equities, according to Tom Furda, director of Russian equity sales at Auerbach Grayson & Co.’s Moscow-based brokerage partner UralSib Financial Corp.

“There’s nothing besides the argument that valuations are cheap to get people excited about Russia,” Furda said in a phone interview from New York on Friday. ‘Oil has been weak, global growth is sluggish, and now for Russia there’s a question of the government’s legitimacy.’’

Futures expiring in December on Russia’s dollar-denominated RTS index rose 0.3 percent to 140,975 in New York trading Friday, after the measure sank 8.8 percent last week, the most among the 21 major emerging-market indexes tracked by Bloomberg.

Climbing Volatility

The RTS Volatility Index, which measures expected swings in the index futures, rose every day last week in the most consecutive increases since November 2010, bringing its advance for the week to 26 percent. The Bloomberg Russia-US 14 Index of Russian companies traded in New York slipped 1.8 percent on Dec. 9 to 91.81, the lowest level since Nov. 25, and extending its weekly decline to 8.1 percent, the most in almost three months.

Russia’s benchmark 30-stock Micex index trades at 4.8 times analysts’ earnings estimates for member companies, the cheapest valuation of 21 emerging-market indexes tracked by Bloomberg.

Moscow-based Gazprom, the world’s largest natural gas producer that makes up 16 percent of the Micex, trades at 3.1 times estimated earnings, compared with 6.2 times for fellow energy producer BP Plc, 7.8 times for Italy’s Eni Spa, 12.6 times for Madrid-based Repsol YPF SA’s ratio, according to data compiled by Bloomberg.

‘Risky Market’

“Regardless of what you think about the valuation of Russian stocks, you can’t disagree that it’s a risky market, so a lot of buyers are on the sidelines unwilling to take on risk at this point in the year,” Arjun Jayaraman, who manages $400 million in emerging-market equities at Causeway Capital Management in Los Angeles, said in a phone interview. “But the market is overreacting. These are certainly not selling opportunities given the valuations.”

The RTS index fell 4.3 percent to 1,410.28 on Dec. 9, the lowest level since Nov. 24, while the Micex slipped 4.1 percent to 1,396.28, bringing its decline in the week to 7.3 percent.

American depositary receipts of Gazprom fell 2.5 percent to $10.68, down 9.2 percent in the week. The company’s shares dropped 4 percent on Dec. 9, and 7.1 percent in the week, to 170.35 rubles, or the equivalent of $5.42. One Gazprom ADR equals two ordinary shares.

Lukoil, VimpelCom

Oil traded in New York gained 1.1 percent to $99.41 a barrel on Dec. 9, paring its decline last week to 1.5 percent. Crude is down 1 percent this month, after jumping 7.7 percent in November, amid concern Europe’s debt crisis is sapping global energy demand. Urals crude, Russia’s chief export blend, climbed 1 percent on Dec. 9 to $108.67, paring its decline to 1.7 percent in the week.

ADRs of OAO Lukoil, Russia’s largest non-state oil producer, fell 8.3 percent last week to $50.85 after shares in Moscow posted a 5.5 percent decline to 1,611.20 rubles, or $51.30. One ADR represents one ordinary share.

VimpelCom Ltd., the nation’s third-largest mobile carrier by subscribers, dropped 0.9 percent to $10.33 in New York trading, extending the weekly decline to 11 percent, as JPMorgan Chase & Co. cut the 12-month price target on the company’s ADRs to $16.50 from $21.50.

VimpelCom said it will decide in January whether to take control of Euroset Holding NV, Russia’s biggest mobile-phone retailer. The company already owns a 49.9 percent stake in Euroset and is yet to decide whether to buy another 25 percent, Elena Prokhorova, the company’s Moscow-based spokeswoman, said in a phone interview on Dec. 9. VimpelCom’s exclusive right to buy another 25 percent in Euroset expires on Jan. 23, she said.

Mine Work Resumed

Rostelecom ADRs fell 3.8 percent to $27.71, and was down 9.9 percent last week, after the Moscow-based company’s Micex shares slid 6.3 percent to 143.37 rubles, equal to $4.55.

HSBC cut Rostelecom’s target price to $35 per ADR from $37, analyst Jean Kaplan wrote in an e-mailed report. The target for ruble-denominated shares listed in Moscow was reduced to 185 rubles from 199 rubles. One depositary receipt is equal to six ordinary shares.

OAO Mechel gained in U.S. trading on Dec. 9, snapping a three-day drop, as Russia’s biggest coal producer for steelmakers resumed production at two mines in Siberia after work there was suspended because of complaints to Russia’s industrial safety watchdog.

Mechel’s ADRs rose 3.2 percent to $10.02 in New York, trimming their weekly decline to 9.9 percent. Shares in Moscow slipped 1.7 percent to 312.20 rubles, or equivalent of $9.93, before the resumption was announced.