The Russian stock market climbed higher Thursday morning as it picked up on a global equities rally, even as counting continues in the closer-than-expected U.S. presidential election.

Stocks around the world rallied Wednesday, but the Russian market was closed for a public holiday, leaving it to hitch a ride higher when markets reopened Thursday morning. The MOEX Index jumped by more than 1.4% in the first minutes of trading — fully regaining territory lost at the end of last week in a mass sell-off.

Russia’s dollar-denominated RTS Index was up even more, rising 2.5% at the open.

While the ruble slipped back against both the U.S. dollar and euro Thursday morning as Democratic candidate Joe Biden appeared to be nearing victory, securing the key states of Michigan and Wisconsin, the stumble was not enough to reverse the currency’s large gains over the last few days. The ruble was one of the best-performing currencies in the world despite the heightened election uncertainty — adding almost 4% against the dollar during a 48-hour hot streak.

As of Thursday morning the ruble stood at 92.1 against the euro and printed 78.4 against the U.S. dollar — both levels stronger than at the start of the week.

The ruble has drifted markedly over recent months as analysts feared a Biden presidency could mean a tougher line against Russia and increased risk of sanctions against the Russian economy. 

That Russia or allegations of Kremlin interference have not been part of the immediate post-election analysis in the U.S. is a potentially good sign for the currency, said Andrey Kochetkov, lead analyst at Otkritie Broker. 

Analysts remain cautious about predicting a sustained rise in Russian assets, however, citing ongoing uncertainty both over the U.S. election result and the coronavirus pandemic, which has seen Europe’s largest economies announce fresh lockdowns.

“It is too early to say that the downtrend in the Russian stock market has been broken,” said Alor analyst Alexey Antanov. “Investors can at any time sell back,” he added, citing the possibility of legal challenges to the election outcome from the Trump campaign and Biden adopting harsh anti-Russia rhetoric or measures over the coming days.

The likely Republican majority in the U.S. Senate could be a slight fillip for Russian assets, Antanov suggested, as it reduces the possibility of a blockbuster green energy bill that would have upset the global oil markets — a key influence on the Russian economy and value of the ruble.

Benchmark Brent crude oil has climbed back above the $40-per-barrel mark in the last few days, and is likely to be swayed by rumors that the OPEC+ group of Russia, Saudi Arabia and other key oil producers, might agree to extend its production cuts when it meets at the end of the month, BCS market analyst Igor Galaktionov said in a research note Thursday morning.

“At the same time, the level of uncertainty associated with the coronavirus epidemic remains high. It is still difficult to reliably estimate how much demand will subside this time … About 500,000 people a day are being infected with Covid-19, which means we can’t yet consider the possibility of an early end to the pandemic.”

Via The Moscow Times