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. Last Updated: 07/27/2016

Stocks Rise as West Starts to Buy

Russian shares ended up Wednesday after eager Western clients saw the market bottoming out of its recent fall and began to buy, traders said.

The dollar-denominated Moscow Times Index of 50 leading shares rose 1.29 percent to 144.41 on heavy turnover of $42.618 million.

The benchmark RTS1-Interfax shares index of the main over-the-counter trade recovered early losses, tacking on 3.77 percent for the day to close at 189.20 on very high volume of $37.6 million.

"Turnover is very heavy and we've seen a lot of Western money in trade," said Aton trader Alexander Bobolev.

After several weeks of growth spurred by optimism around December's parliamentary election and President Boris Yeltsin's surprise resignation on New Year's Eve, the market began to ease on Tuesday as edgy domestic investors took profits.

Bobolev said those events last month continued to be the dominant impetus on the market and that it was almost completely unresponsive to any external influence.

"As before, optimism remains high. ... That story has not played out yet and the market is not paying attention to things like oil prices or [U.S. markets]," he said. "It is being driven purely by optimism and strong expectations of more growth."

A Western trader agreed.

"There's clearly a lot of room for growth and Western investors see that. ... Domestic investors are much more nervous these days than their Western counterparts and less able to resist the urge to take profits.

"It's a natural urge after so many were burned [by the August 1998 financial meltdown] but the market needs committed long-term funds if gains are to be sustained.

"Top shares ended mixed with national power grid UES giving up afternoon gains in late trade to close down 2.8 percent and at $0.1390.

Utility Mosenergo rose 1.09 percent to end at 4.6 cents, while oil major LUKoil closed flat at $12.80. Surgutneftegaz oil saw the biggest gains among top shares, closing up a solid 10.6 percent at 31.30 cents.