Which 1998 event caused Russia’s stock market to plunge after a sovereign debt default and ruble devaluation?

The 1998 event that caused Russia’s stock market to plunge after a sovereign debt default and ruble devaluation was the Russian financial crisis.

Russia faced weak tax collection, falling commodity prices, political uncertainty, and heavy reliance on short-term government debt known as GKOs. On August 17, 1998, the government devalued the ruble, announced a restructuring of domestic debt, and temporarily halted some debt payments.

The ruble lost much of its value, banks came under severe pressure, and the Russian Trading System index collapsed. The crisis also helped trigger the failure of Long-Term Capital Management, whose positions were threatened by extreme market moves.

The Russian crisis formed part of a wider sequence of emerging-market turmoil after the 1997 Asian financial crisis. It was not simply a stock-market event: currency, sovereign-debt, banking, and international-credit problems reinforced one another.