Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Poll Result for 'Bear' Sets Bulls Loose

A healthy showing for an electoral "Bear" - the mascot of pro-Kremlin bloc Unity - has set loose the bulls on the Russian stock market, which leapt up 8.78 percent Monday on the strength of results from Sunday's State Duma elections.

And while the market will soon take a breather for the holiday season, traders expect the market to go on soaring after the New Year.

"The fact that elections took place is in itself positive news," said Kirill Maltsev, head of sales with Rye, Man and Gore.

The rally began late last week when it became clear that pro-government factions Unity and the Union of Right Forces were going to do well in the vote. Foreign buying started last week and American Depository Receipts were trading higher Friday after the Russian Trading System closed in Moscow.

The upward trend resumed Monday, with the trio of "old faithfuls" - LUKoil, Surgutneftegaz and Unified Energy Systems - the focus of a buying spree.

The Moscow Times Index of 50 leading shares broke through the 100 barrier for the first time since July 16 this year to close at 101.58 in relatively high volumes of $26.86 million, the heaviest day's trading since early July.

So frantic has been the rise in stocks that some traders are hoping a correction will take place to drive the most aggressive speculators out of the market.

"A correction would be helpful to take some tension out of the market," Maltsev said.

Traders say they expect growth to resume in January-February and hope that the rally will last until the presidential election, even though the fundamental risks remain high.

"We changed our rating on Russia to overweight from neutral in November and reiterated it in December," said Dmitry Yudin, Russian market analyst with Merrill Lynch (London).

Even though many foreign investors were far from positive about Prime Minister Vladimir Putin - whose economic policies remain unclear - they were still lowering their risk assumptions.

"I don't think that these results are especially positive," Andrew Kenningham, East European economist at Merrill Lynch, said in remarks reported by Reuters. "This is one of those occasions where the market reacts as expected but it still does not make much sense."

Over the past six months, the percentage of foreign stocks held by U.S. funds crept up from 3.5 percent to 3.8 percent, Reuters reported Monday.

Moscow-based economists were not especially impressed with the election-inspired mini-rally.

"I would not overestimate sustainability of recent growth," said Yevgeny Gavrilenkov, deputy head of the Bureau of Economic Analysis.