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. Last Updated: 07/27/2016

Market Quiet Ahead of U.S. Fed Decision

Shares closed little changed Tuesday as traders were reluctant to take up positions ahead of a decision by the U.S. Federal Reserve on interest rates.

The dollar-denominated Moscow Times Index of 50 leading stocks rose 0.39 percent to 117.02 on turnover of $10.5 million. The key RTS index closed down 1.08 percent at 141.25 on thin volume of $7.6 million. The broader Reuters Russian Composite index rose 0.08 percent to 1,057.43.

"It"'s very very quiet on the Western side today. … People are hesitant to trade ahead of the [Fed] meeting in Washington," said Michael Stein at United Financial Group. "If there is a lowering of Western interest rates, that would be a positive sign for emerging markets in general and a positive signal for Russia, which has underperformed sharply on concerns about a hard landing in the States."

The RTS rose by half a percent in the last half hour of trading on what Alexei Dolgikh of Troika Dialog brokerage said was likely small, speculative orders.

Dolgikh said that if the Fed lowered interest rates, "I think that it [the RTS] will rise 5 percent. Even one Russian speculator could do this."

But he was not sure if lower interest rates could hold the market up for more than a day or two. "There are no big buyers in Russia … prices are ridiculously cheap but no one is seriously interested," he said.

Gazprom local shares, which are traded on the Moscow Stock Exchange and barred for sale to foreigners, closed at 7.616 rubles, up more than eight percent.

"There is local investor demand for the stock, although there is no news to explain the demand," Stein said.