Russian ruble rises to 83 against dollar before easing, stocks mixed

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March 29 (Reuters) – The Russian ruble soared more than 7% to 83 to the dollar in Moscow on Tuesday before paring some gains, hitting a more than a month high near levels last seen before the Russia isn’t sending troops to Ukraine, while stocks ended another volatile session in mixed fashion.

The Russian market is gradually reopening after a suspension caused by broad Western sanctions that followed the start of what Russia calls “a special operation” in Ukraine on February 24.

As of 13:33 GMT, the ruble was up 5.2% against the dollar at 85.10, after touching 82.9525, its highest level since February 25. It gained 1.9% to trade at 94.76 against the euro, earlier hitting a February 25 high of 92.10.

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In offshore trading, the ruble was weaker, hovering at 87 per dollar on the EBS electronic platform.

According to Iskander Lutsko, chief investment strategist at ITI Capital, two powerful drivers – Russia switching to the ruble for gas export payments and exporting companies being required to convert 80% of their foreign currency earnings into rubles – support the Russian currency.

“The market now really depends on the progress of negotiations between Russia and Ukraine,” Lutsko said of the Russian stock market, as the two sides met for one-on-one talks in Turkey and there were tentative signs of progress. Read more

STOCKS RECOVER

Russian shares were trading in shortened sessions and with various restrictions, including a ban on short selling. Non-residents are not allowed to sell stocks and bonds in OFZ rubles until April 1. Trading volumes are well below normal.

The dollar-denominated RTS index (.IRTS) ended the session shorter up 7.1% to 881.6 points, but the Russian ruble-based MOEX index (.IMOEX) pared its early gains to lose 0.9% to 2,408.5 points.

Evgeny Suvorov, an economist at CentroCredit Bank, said the total capitalization of the MOEX index is now around six times smaller than the market capitalization of US tech giant Apple (AAPL.O).

Flagship Aeroflot (AFLT.MM), one of the most volatile stocks since reopening, jumped 16.4%. Oil major Rosneft (ROSN.MM) rose 3.4% and dominant state lender Sberbank (SBER.MM) gained 3%.

Moscow-listed shares and certificates of deposit of some overseas-listed companies resumed trading on Tuesday.

Nasdaq-listed tech giant Yandex saw its Moscow shares climb 4.6%, while London-listed retailer Fix Price’s certificates of deposit soared 13.2% (FIXPDR.MM).

London-listed internet company VK, one of the few firms to report debt servicing issues, saw its certificates of deposit in Moscow jump 72.3% to levels seen in mid-February . Read more

The Moscow Stock Exchange said it had held “low-key auctions” of Aeroflot and VK shares. A quiet auction is a tool the exchange can use to try to smooth out extraordinary volatility and allow a basis price to form for the security.

VK stocks closed the session at a price of 510 rubles, up from a record low on February 24, but still far from the levels of around 2,000 rubles seen at the start of 2021.

VK’s flagship social network Vkontakte has set new records for user activity over the past month following the blocking of foreign platforms. Read more

“Market players are likely overvaluing the company after rival social media work was curtailed in Russia,” BCS analysts said.

EUROBOND-TESTING

Russia’s Finance Ministry said on Tuesday it had fully paid a coupon on its Eurobond due in 2035, its third installment since unprecedented Western sanctions challenged Russia’s ability to service its foreign currency debt. Read more

But Russia retaliated in what it called an “economic war” with the West by offering to buy back its $2 billion Eurobonds due next month in rubles rather than dollars. Read more

Yields on the benchmark Russian 10-year OFZ Treasury notes fell to 12.68%, further away from last week’s record high of 19.74%, which was just below the benchmark interest rate. central bank. Yields move inversely to prices.

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Reuters reporting; Editing by Robert Birsel, Jan Harvey, William Maclean

Our standards: The Thomson Reuters Trust Principles.

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