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. Last Updated: 07/27/2016

Market Correction Expected After Rally in Russian Stocks

Russian shares edged up in thin trade Monday on growing optimism on international markets, but dealers predicted a minor and short-term correction in the next few days.

The Russian Trading System spot index for the last hour of trade was 392.32, up 5.54 percent from Friday's close.

The RTS 21-share official index, calculating average prices over the previous 24 hours, was 388.13 at close after Friday's closing 382.42. The volume was $62.6 million.

The Moscow Times Index rose 5.85 percent to close at 293.86.

Dealers said national electricity company UES, which closed at $0.2740 up from $0.2590 on Friday, was barely influenced by news of a sharp jump in pretax profits for the first nine months of 1997 Monday and news it had launched an American Depository Receipt program in November.

LUKoil closed at $22.875 up from $22.05 Friday close.

Dealers attributed most of the rise to closing short positions, but said calm client demand was also there.

"We now definitely see new money, but a considerable part of money still comes from old clients who are forming or leveling positions for the new year, and are well aware of the potential of the Russian market," said UCB trader Maxim Perlin.

Dealers suggested that a minor correction is possible on the market in the next few days.

"It is a positive sign that we stabilized around Friday's closing levels. But a market search for new levels is still under way," Perlin said. "I think tomorrow or day after tomorrow we will see some fall in prices."