(Adds comments and details, updates prices)
By Jason Bush
MOSCOW, March 21 (Reuters) - Russian stock indexes fell sharply on Friday as investors digested the impact of U.S sanctions over Ukraine, including possible moves by Washington to target whole sectors of Russia's economy.
At 0720 GMT the rouble-denominated MICEX was down 3 percent to 1,281 points while the dollar-denominated RTS index had fallen 3.6 percent to 1,109.
The falls came a day after U.S. President Barack Obama said Washington was considering sanctions against key economic sectors in Russia, including financial services, oil and gas, metals and mining and the defence industry, if Russia made military moves into eastern and southern Ukraine.
EU leaders, meeting in Brussels, have said they will introduce more asset freezes and visa bans against Russian officials, and are mulling wider economic sanctions if Russia further destabilises the situation in Ukraine
In a morning note, Promsvyazbank analyst Oleg Shagov said Obama had "opened a Pandora's box full of sanctions", with future sanctions to be "directed against whole sectors of the Russian economy".
The United States also introduced asset freezes and visa bans against high-ranking Russian officials and businessmen, dubbed "cronies" of President Vladimir Putin.
A St Petersburg bank linked to these businessmen, Bank Rossiya, was also sanctioned, with U.S. officials saying that the bank would be "frozen" from the dollar.
On Friday, Bank Rossiya said Visa and Mastercard had stopped providing services for payment transactions for the bank. Earlier the bank said it was working "in a stable regime".
Bank Rossiya is not listed, but the sanctions against the bank - coupled with the U.S. threat of further measures - has raised fears that similar actions could be taken against other Russian banks, echoing U.S. measures against Iran or Syria.
Investcafe analyst Grigory Birg said in a morning note that "one can expect a sharp negative reaction in the dynamics of Russian bank shares".
Shares in Sberbank, Russia's largest bank, were down 2.9 percent on Friday, while shares in VTB were down 4.3 percent.
However the falls were broad-based, with shares in most of Russia's blue-chips also down around 3 percent.
Gas giant Gazprom was down 2.5 percent, oil company Lukoil down 3.2 percent, steel company NLMK down 2.9 percent and telecommunications company MTS down 3 percent.
Shares in independent gas producer Novatek fell by 5.7 percent. The company is part-owned by Gennady Timchenko, a shareholder of Bank Rossiya and one of the wealthy businessmen who has been sanctioned because of alleged links with Putin.
Negative market sentiment was reinforced by warnings from ratings agencies Fitch and S&P that they were changing their outlooks on Russia to negative from stable, because of the potential impact of sanctions on Russia's economy and business climate. Both agencies presently rate Russia BBB.
Russia's Deputy Finance Minister Alexei Moiseev said in response that he did not see any immediate impact from sanctions on Russia's financial sector or creditworthiness.
In contrast to Russian shares, the rouble was stable on Friday, having fallen steeply on Thursday evening in response to the U.S. sanctions statement, and helped by the need for Russian exporters to buy roubles to pay end of month taxes.
At 0720 GMT it was down one kopeck against the dollar at 36.39 and 0.1 percent to 50.16 against the euro.
It had fallen 0.1 percent to 42.58 against the dollar-euro basket. (Reporting by Jason Bush, editing by Elizabeth Piper)