Russian stocks, rouble see cautious rebound after Ukraine panic

by Reuters
Tuesday, 4 March 2014 06:57 GMT

MOSCOW, March 4 (Reuters) - Russian stock indexes rose on Tuesday morning, partially reversing double-digit losses on Monday when the market crashed over fears about the international crisis over Ukraine.

At 0645 GMT the rouble-denominated MICEX stock index was up 2.4 percent to 1,320 points, while the dollar-denominated RTS index was up 2.6 percent to 1,144 points.

The indexes were up over 4-5 percent within a few minutes of opening but then eased back.

In a morning note, BCS analyst Mark Bradford said a cautious rebound was possible on Tuesday following panic selling on Monday, as there had not been a further significant deterioration in the situation in Ukraine.

On Tuesday, Russian President Vladimir Putin ordered troops who had been engaged in large-scale military exercises in Russia back to base.

The rouble also recovered, after falling the previous day, when the central bank raised its key interest rate by 1.5 percentage points and revised its forex policy to enable larger interventions to support the rouble.

At 0645 GMT the rouble was up 0.5 percent to 36.32 against the dollar and 0.4 percent to 49.97 against the euro.

It had risen 0.3 percent to 42.52 against the dollar-euro basket.

The central bank announced on Tuesday it had moved the rouble's floating corridor by an unusually large 35 kopecks to 35.75-42.75 the previous day.

On Monday, the central bank said it was increasing the intervention threshold to move the corridor by 5 kopecks to $1.5 billion from $350 million, and that it would revise its intervention parameters on a daily basis.

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