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. Last Updated: 07/27/2016

Russian Blue Chips Drop 5%

Russian blue chip stocks closed around 5 percent lower Thursday, although short-covering slowed their fall toward the end of the trading day.

Dealers said continuing low volumes and nervousness made it hard to predict what would happen on Friday.

"After a whole day of sales, the market began to rise with an hour to go -- now no one is risking opening short positions for more than one day," said Regent European Securities trader Nikolai Gusev.

The Moscow Times dollar-adjusted index of 50 leading shares fell 5.13 percent to 253.97 on a volume of dollars 41.73 million. LUKoil shares closed down at dollars 19.40 after ending Wednesday at dollars 20.16. United Energy Systems closed at dollars 0.2315 from dollars 0.2403.

Dealers said sales by Westerners had stepped up despite the U.S. Thanksgiving holiday, but remained limited, which could put the brakes on any further slide.

"Today's drop is entirely in line with recent trends," said MFK-Moscow Partners trader Denis Sysoyev, referring to the limited falls and rebounds of the past few days.

At a cabinet meeting Thursday, Central Bank head Sergei Dubinin said foreign players were unlikely to return to the Russian equities marketuntil the first half of 1998.

Dubinin was presenting the Central Bank's draft outline of monetary and credit policy for 1998. It calls for continuing the anti-inflation program, boosting confidence in the ruble and pushing interest rates lower to stimulate growth.

The RTS index fell 4.7 percent to close at 340.03, against the trend of most European exchanges, which drifted higher.

"Maybe everyone's gotten fed up with this nervousness and are closing their positions to avoid further losses," said Gusev. "I find it hard to predict what will happen tomorrow."

The Central Bank has denied any banks have serious problems meeting their payments.