Moscow’s stock market rallied after share trading resumed for the first time since the Ukraine invasion began nearly a month ago, although the US dismissed Thursday’s limited reopening as a “charade”.
The market initially rose by more than 11% when a limited, shortened trading session got under way on the Moscow Exchange. But the rally lost some momentum, with the Moex index of blue-chip shares ending the day 4.4% higher, on its first session since 25 February.
Energy companies and commodity producers led the gainers, reflecting the rise in gas, oil and raw material prices since the war began, but some companies exposed to the extensive sanctions imposed on Russia fell.
Just 33 of the 50 securities on the rouble-denominated Moex were trading, while the RTS index of Russian companies quoted in US dollars remained shut.
Stocks which were trading were supported by new restrictions, including a bar on traders short-selling shares they do not own, while foreign investors cannot sell stocks until 1 April.
Reports earlier this month that Russia planned to channel up to 1 trillion roubles (£7.7bn) from its national wealth fund to buy stocks could also have encouraged buying.
The US was scathing about Moscow’s attempt to restart equities trading.
“What we’re seeing is a charade, a Potemkin market opening,” said Daleep Singh, the US deputy national security advisor for international economics, referring to fake villages supposedly created for the Russian empress Catherine the Great to give the illusion of prosperity.
“After keeping its markets closed for nearly a month, Russia announced it will only allow 15% of listed shares to trade, foreigners are prohibited from selling their shares, and short selling in general has been banned. Meanwhile, Russia has made clear they are going to pour government resources into artificially propping up the shares of companies that are trading,” he said.
“This is not a real market and not a sustainable model – which only underscores Russia’s isolation from the global financial system.”
Traders agreed that the heavy restrictions meant Moscow was not a properly functional market. “The Moex rallied in early trade, but that is what happens if lots of people can’t sell,” Neil Wilson of Markets.com pointed out.
The chemical firm PhosAgro, which produces fertilisers and phosphates, surged by 26% while oil and gas group Tatneft jumped 20%, and energy giant Gazprom gained 13.4%. Nickel and palladium miner Nornickel rose 10%.
The airline Aeroflot sank 16%, the top faller, with Russian planes banned from European Union and UK airspace. The state-owned bank VTB dropped 5.5%. having been hit by western sanctions. The oil pipeline operator Transneft fell 6%, and children’s toy retail chain Detsky Mir lost 5.5%.
Despite Thursday’s recovery, the Moex is still down almost a third this year, having weakened in the run-up to the Ukraine invasion and plunged when it began.
The rouble fell by nearly 10%, to around 98 roubles to the dollar, reversing Wednesday’s gains after President Vladimir Putin said “unfriendly” countries would be forced to pay for their gas purchases in roubles rather than dollars.