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. Last Updated: 07/27/2016

Markets See Lull During Heady Rise

Russian markets paused for a breather Thursday after heady gains this week, but some traders said they believed the markets could renew their climb soon.


The dollar-adjusted Moscow Times Index, which gained nearly 5 percent Wednesday, finished up 0.81 points Thursday at 131.25.


Share volume on the Russian Trading System, which reached a record $46.97 million Wednesday, settled back to $28.2 million Thursday. The RTS index gained 1.67 percent to 184.67 points.


Robert Devane of Troika-Dialog said the market would post gains in coming weeks but that it could lose ground closer to the time of President Boris Yeltsin's planned heart-bypass surgery, expected in the next couple of months.


"It is highly unlikely the market will continue its run-up through the surgery," he said, predicting a bell curve of growth and then a fall potentially below Thursday's levels.


?In London, Merrill Lynch has upgraded the Russian equity market to "overweight" as it believes the positive investment ratings from credit ratings agencies will feed through to investor confidence in the equity market.


"With Standard & Poor's rating at BB- and Moody's rating at Ba2, we believe that the market is set for further appreciation," Merrill First Vice President Dan Lubash said.





Merrill picks telecommunications and oil companies as strong sectors.





Traders said Thursday they were not surprised by the market, as Russian investors and brokers took profits after Wednesday's surge. Some traders said they saw Western buying.


Yields on short-term T-bills fell below 50 percent Wednesday for the first time in the three-year history of the market. That was good news for the government because it points to a drop in its borrowing costs.


"The trigger for the emotional volatility will be the Yeltsin surgery."