Russian stocks gain, regulators change rules after more trade halts
Russia's MICEX index surged by over 11 per cent Tuesday following gains on world markets and boosted by higher oil prices, prompting regulators to change the threshold for automatic market closures to minimize what have become chronic interruptions in trading, reproted dpa.
The ruble-denominated MICEX was up 11.02 per cent to 739.78 points at 2:05 pm (1005 GMT) after an hour-long -suspension in morning trading.
The rise on the MICEX, where most Russian stocks are traded, was led for a second day running by banks Sberbank and VTB Group on news of government loans to banks as well as Russian oil majors Rosneft and Lukoil, trading on a rise in global oil prices.
The dollar-denominated RTS added 6.9 per cent to 845.81 points by 2:05 pm.
Market authorities have stopped and started the clock on trades over a dozen times in the last month compounding market uncertainty, investors charged.
"The whims of the regulator make it impossible to predict the working hours of the Russian exchanges," Ivan Ivanchenko, head of investment strategy at VTB, criticized Tuesday while Alfa bank said in its note Monday that the market stoppages are leading to "mispricing" in stocks.
They blamed a drop on Moscow's bourses Monday despite positive news on other exchanges on the stocks being out of sync and forced to play catch up after authorities failed to even open trading on Friday.
Market watchdogs again on Tuesday amended the rules of trading.
The Federal Financial Markets Service said trading would only now be suspended an hour on the MICEX and RTS if the bourses shoot up or down more than 10 per cent, replacing the previous 5 per cent mark.
Analysts expressed relief at the latest stock rebound, but cautioned that the crisis may not yet be over for Russian markets.
"There are still too many unknowns to call it a bottom. And even if we have already seen the lows, the expectations for the global economy's future path do not support a fast recovery of Russian indices to anywhere near the levels they were at when the year started," Ivanchenko of VTB said.
Russian indexes are down over 60 per cent from peaks in May.
Moscow's markets have also been undercut by investors queasiness over Russia's recent war with Georgia amid the global turmoil.