Moscow stocks higher after Crimea votes to join Russia 

Russia-Crimea_

Russian shares opened higher on Monday after Ukraine’s Crimea region voted in favour of joining Russia, as local investors shrugged off threatened Western sanctions believing they would be largely symbolic.

At 0745 GMT the dollar-denominated RTS index .IRTS was up 1.4 percent at 1,078 points, while the ruble-denominated MICEX was up 1.3 percent at 1,254 points.

The indexes had opened up 2.4-2.5 percent before edging back.

Dmitry Ryzhkov, a trader at Renaissance Capital, said negative expectations linked to the vote had largely been priced in earlier as the market has been sliding for the last two weeks.

“For the time being there is nothing new: they carried out the referendum, they haven’t yet announced sanctions. Simply for the time being, there are Russian investors who are buying in the belief that there is a bright future,” he said.

“Let’s wait for the opening of London and the (United) States,” he added.

European Union foreign ministers are meeting later on Monday to discuss sanctions against Russia that are expected to include asset freezes and visa bans on Russian officials accused of violating Ukraine’s territorial integrity.

Some analysts said they had expected Russian assets to slide on uncertainty over the scale of measures the West will impose over the seizure of Crimea.

Others however believe that the market was due for a rebound after the sell-off over recent weeks and down-played the threat of Western sanctions.

“The referendum on March 16 passed peacefully. This fact could cheer investors who are looking at the strongly oversold Russian market,” commented Zerich Capital analyst Oleg Dushin in a morning note.

“Of course there will be sanctions from the West, but for the time being they concern officials and not corporate assets. However, anything is possible in future,” he wrote.

The ruble edged down slightly, weakening against the dollar but strengthening against the euro.

At 0745 GMT it was 0.1 percent weaker at 36.64 against the dollar and two kopecks stronger against the euro at 50.63.

The rouble was down 0.1 percent to 43.09 against a dollar-euro basket.

The central bank said on Monday that it had shifted the ruble’s floating corridor against the basket to 36.10-43.10 on Friday, implying that the rouble is now trading close to the edge of the corridor where the central bank carries out unlimited interventions to support it.

(Reporting by Olga Popova, Lidia Kelly and and Jason Bush; Editing by Andrew Heavens)

Source: reuters

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