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. Last Updated: 07/27/2016

Market Closes Slightly up, But Gains Are Vulnerable

Russian shares ended slightly firmer Thursday, partly due to investors closing short positions, but traders said flagging world markets and sluggish oil prices meant those gains could quickly fade.

Shares rose in early trade as investors began buying to cover short positions, reversing a five-day downward trend, but by the close the market had shed much of the opening gains.

The benchmark RTS1-Interfax index added 1.35 percent to end at 128.85, having gone beyond 132 earlier. The broader Reuters Russian composite rose 1.75 percent to 489.22.

The dollar-denominated Moscow Times Index of 50 leading shares rose 1.19 percent to 97.33 on turnover of $13.59 million.

Volume on the main over-the-counter market, the Russian Trading System, was improved at just under $13 million.

"The growth we saw today can't be connected with renewed client demand," UCB Flemings senior trader Samit Yakovlev said.

"I think the market should expect its correction to go even further ? Even if there is no further downward movement the market's stagnation will continue."

Traders noted that the political atmosphere in Russia was becoming more tense ahead of December parliamentary elections.

They also said there was a negative reaction to news that Russia's currency reserves fell for the third straight week.

Top shares ended mixed with oil producer LUKoil dropping 1.05 percent to end at $9.40.

National power grid UES ended up 3.31 percent at $0.0936, Surgutneftegaz was 1.33 percent higher at $0.1900 and Mosenergo was up 4.39 percent at $0.0409.