Russian stocks jump as much as 12% in Moscow after a monthlong trading halt, backed up by $10 billion of government cash
- Moscow's stock market jumped as much as 12% as it partially reopened after a monthlong closure, and closed 4.4% higher.
- The Russian government has pledged to prop up the market with $10 billion from the sovereign wealth fund.
Russia's main stock index rose as much as 12% Thursday as the government reopened trading in Moscow for the first time in a month, having pledged to support the market with around $10 billion of state cash.
The Moex index then pared gains, to finish the shortened four-hour session 4.4% higher. Shares in energy companies rose, thanks in part to the surge in oil and gas prices since Russia invaded Ukraine at the end of February.
Trading resumed in just 33 out of the 50 stocks that make up the Moex, Russia's benchmark stock index. The Moscow exchange had been shut since February 25, a day after the invasion began.
There were strict limits on trading. Foreigners have been banned from selling equities until April 1; trading ran for a shortened four-hour period; and investors were not allowed to bet against stocks.
The Russian government has said that it will use up to $10 billion from the country's sovereign wealth fund to support the market. However, it was not clear whether the money was being deployed Thursday.
Among the limited stocks trading, Lukoil ended the session up 12.3%, while Gazprom finished 13.1% higher, according to Bloomberg data. Sberbank ended 4.2% in the green.
However, VTB Bank, which has been heavily sanctioned, finished 5.5% lower. Shares in airline Aeroflot tumbled 16.4%.
"As to why the market's not plunging here, even before the crisis it was by far the cheapest equity market in the world," Ben Laidler, global markets strategist at trading platform eToro, told Insider. He said it's now even cheaper, attracting some domestic bargain hunters.
"The other thing that really stands out, is three-quarters of the index is made up of commodities [companies], which are obviously rallying, and prices are high and business is good."
Thursday's action was a far cry from the events of February 24, when the Moex index fell as much as 50%. Even with Thursday's 4% rise, the index was down 33% for the year.
Almost 60% of trading volume on Thursday was from individual investors, the Moscow exchange said in a statement. It said there were 567,000 retail investors, and 121 professional participants.
The White House slammed the reopening of the market on Thursday morning, labeling it a "charade."
"Russia has made clear they are going to pour government resources into artificially propping up the shares of companies that are trading," said Daleep Singh, a US deputy national security advisor, in a statement Thursday morning.
"This is not a real market and not a sustainable model — which only underscores Russia's isolation from the global financial system."