Russian equities tumbled this morning after the country’s forces surrounded Ukrainian military bases in the Crimea over the weekend. The Micex was down 10% at 1,300 shortly after 08:00 UK time.

The Russian central bank had earlier raised rates from 5.5% to 7% after the rouble fell by 2.3% to hit a record low against the dollar in early trading.

The rouble is now trading at 36.34 against the dollar, a fall of 1.4%, and is now down 10% year-to-date.

The risk-off environment had a knock-on effect on other markets, with emerging market stocks falling 1% and spot gold rising $22 to $1,348, its highest level since mid-October.

WTI crude oil, meanwhile, rose 1.6% to $104.2, the highest level since 2011. Brent crude rose 2% to $111, the highest level seen this year.

In the UK, the FTSE 100 opened down 1.3%, shedding 90 points to stand at 6,721.

Russian parliament voted this weekend to send troops into Ukraine. Lawmakers said the moves were aimed at guaranteeing the safety of Russian speakers in the aftermath of Ukrainian president Viktor Yanukovych’s departure from his post.

President Obama has warned Russia that its actions to send troops are a breach of international law and a threat to peace and security.