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. Last Updated: 07/27/2016

Western Buyers Push Stocks to New Highs

Russian share prices ended at 1999 highs Friday as a buying frenzy by Western investors pushed the crisis-worn market into a new rally.

Volume in the dollar-denominated Moscow Times Index of 50 leading shares soared to $11.96 million on the foreign buying, a week after the market rallied on the back of renewed interest among domestic investors.

"Unlike last week, when buying was led by Russian investors, today we have seen Western institutional investors return with a vengeance," said Martin Diggle, a director at Brunswick Warburg brokerage.

Some traders were cautious about what the latest gains meant to the market, devastated by the start of the crisis last August, but most seemed confident it could preface an even bigger comeback.

"The kind of buyers we are seeing today are long-term buyers who up until now have had low Russia margins. It seems that some of them want to correct that," Diggle said.

"The Russian market was by far the worst performing last year. With things as low as they have gotten, there is a lot of room for growth."

The MT Index reached a new high for the year, up 5.42 percent to close at 50.73, while the RTS index rose 5.57 percent to 70.22. The market ended the week up 7.55 percent.

Traders were mixed about what sparked the day's rally.

Some said it was remarks Thursday by Mark Mobius, head of emerging markets at Templeton Investment Management, who said Russia would be 1999's best-performing emerging market.

Mobius said in London that he believed Russia would make policy changes to ensure economic stability and restore investor confidence.

Others said the market might still be benefiting from news of a proposed domestic debt restructuring deal that could funnel some $200 million into the crisis-hit market.

Oil major Sibneft was Friday's big winner, gaining 17.65 percent to $0.020, while Megionneftegas followed rising 16.67 percent to $0.140. Oil company Sakhalinmorneftegas saw the largest losses as its shares fell 16.67 percent to $0.300.