Baltic, Exchange, Financial Services, Investments

Latvian OMX Riga Index at 16:00 p.m. local time plummeted 3.41%, Lithuania's OMX Vilnius Index plunged 2.78% to the lowest in almost a month, at 16:00 p.m. local time. The Estonian benchmark index dropped 1.36%.

"People are selling to take the cash home as the backdrop of economies doesn't look that solid," said Arvydas Jacikevicius, a Vilnius-based senior broker at SEB Bankas, in a phone interview. "In the short term, the correction will continue."

Investors have started to recognize that the rally in Baltic shares was "exaggerated" as there is a lack of positive news in the region, said Kristiana Kiete, a senior equity analyst at Parex Asset Management in Riga.

Estonian and Lithuania stocks were among the world's 20 worst performers in 2008 as the global financial crisis drove up borrowing costs, leading Latvia to ask for international bailouts. The economic crisis triggered investor concern Latvia would be forced to abandon its currency peg to the euro, with a domino effect causing devaluations in Estonia and Lithuania.