The rouble-traded MICEX dropped 1.9 percent in the first minute after trading began and was down 1.6 percent at 1,417 points at 0603 GMT. The dollar-denominated RTS fell 2.4 percent to 1,267 points.
News that nearly 298 were killed when a Malaysian Airlines plane was brought down in eastern Ukraine came after the market closed on Thursday, when shares were driven down by concerns over new sanctions on Russia over the Ukraine crisis.
World leaders have demanded an international investigation, while both Russia and Ukraine denied involvement in the incident.
"The origin of the crash will only be revealed after the official investigation is finished, but in any case it has massively increased global attention on what is occurring in the conflict zone," Sberbank CIB said in a note about Russian market.
"The vast majority of casualties are Europeans, which may turn EU public opinion towards introducing additional sanctions against Russia," it added.
The tragedy happened a day after the United States imposed new sanctions no Moscow, a move that hit Russian assets and the rouble.
The MSCI global emerging equities index was down 0.5 percent.
Meanwhile, the rouble touched a two-month low against the dollar after trading began and was down 0.05 percent at 35.17 at 0620 GMT. The Russian currency was also down 0.1 percent against the euro at 47.53.
This left the rouble down 0.1 percent at 40.71 against the dollar-euro basket that the central bank uses to guide the currency's nominal exchange rate.
"If geopolitical tensions increase, there is plenty of room for the rouble to underperform further," VTB Capital said in a note.