(Bloomberg) -- Russian stocks trading in New York fell for the first time in three days, led by OAO Lukoil, amid concern that mounting tension in Ukraine will result in economic sanctions.

The Bloomberg index of Russian shares listed in the U.S. retreated 1.2% from a two-week high to 82.87 yesterday. American depositary receipts of Lukoil, the country’s second- largest oil producer, slumped 3.1%. VimpelCom Ltd. rose to a six-week high after agreeing to sell a majority stake in its Algerian unit Djezzy.

The declines follow the first exodus by investors from the Market Vectors Russia exchange-traded fund since March 3. The ETF sank 3.8% yesterday after deadly shootouts in Ukraine over the weekend led to renewed calls in the U.S. for further sanctions against Russia. Secretary of State John Kerry warned Russia that there will be consequences if it fails to restrain militants in Ukraine, a U.S. spokeswoman said in Washington.

“The situation for investors in Russian stocks has got to be viewed as somewhat dicey,” John Manley, who helps manage more than $200 billion in assets as chief equity strategist at Wells Fargo Funds Management, said by phone from New York yesterday. “It’s hard for me to see a way that this de- escalates quickly. These things take a long, long time to work out.”

More Sanctions

The U.S. has threatened more sanctions against Russia, with measures targeting its banking and energy industries, unless progress is made on carrying out the accord. Russia may face a “technical recession” in the second or third quarter, Maxim Oreshkin, head of the Finance Ministry’s strategic forecasting department, told reporters yesterday. The Micex Index declined 0.9% to 1,345.04 yesterday in Moscow, bringing its slump this year to 11%.

Kerry told Russian Foreign Minister Sergei Lavrov yesterday that Russia must honor the commitment made in Geneva to de- escalate. “There will be consequences” if Russia fails to act “over the next pivotal days” to restrain pro-Russian militants in eastern Ukraine, spokeswoman Jen Psaki said in Washington.

An agreement signed last week by Ukraine, the European Union, the U.S. and Russia called for all illegal groups to give up their arms and return seized buildings. Pro-Russian forces held their ground in several eastern cities, as their leaders denied they were bound by the accord. The government in Kiev has said Russia is behind the unrest, exploiting the situation to prepare a potential invasion.

In Moscow, Lavrov called on the U.S. to hold Ukraine’s interim government accountable for curbing what Russia portrays as right-wing militias.

ETF Outflows

Investors pulled $42 million from the Market Vectors Russia exchange-traded fund on April 16 and 17, the first outflows from the ETF since March 3. That compares with last month’s record $574 million deposits, according to data compiled by Bloomberg.

The Russian ETF traded at 4.4% above its net asset value on April 17 as investors bought the fund on U.S. exchanges when news about the Ukraine accord in Geneva came out after the close of trading in Moscow. The gap between the ETF and its underlying assets was the biggest since 2010, data compiled by Bloomberg show. That relationship was normalizing on April 18 when investors in Russia caught up as U.S. markets were closed for a holiday.

“It’s headline trading,” Dave Lutz, the head of ETF trading and strategy at Stifel Nicolaus & Co., said in an interview from Baltimore. “Russia was a great performing market until 2014, so hot money flees now and traders are moved by the latest news instead of fundamental factors.”

Lukoil, VimpelCom

The Bloomberg Russia-US Equity Index extended this year’s slide to 19%. Lukoil ADRs retreated to $52.75, following a two-day rally. The Micex Index dropped 0.3% to 1,340.71 by 1:19 p.m. in Moscow today.

West Texas Intermediate crude oil fell 0.1% today to $104.24 a barrel, heading for the first loss in four days. Brent crude also declined 0.1% to $109.84 a barrel, after climbing to a seven-week high yesterday.

VimpelCom rose 2.8% to $9.25. The company, co-owned by Russian billionaire Mikhail Fridman and Norway’s Telenor ASA, agreed to sell 51% of Orascom Telecom Algerie SpA, or Djezzy, to the Algerian National Investment Fund for $2.64 billion, VimpelCom said April 18 in a statement. Djezzy will also pay a $1.86 billion dividend to VimpelCom’s Global Telecom Holding SAE unit before the transaction closes.

The RTS Volatility Index, which measures expected swings in futures, climbed 3% to 35.94 in U.S. hours while RTS stock-index futures expiring in June declined 0.6% to 114,150.

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