RTS Surges Nearly 6% to 219

Shares advanced on a broad front by the close Thursday, spurred by Western buying against a background of recovering oil prices.

The RTS closed 5.61 percent higher at 219 on turnover of $27.5 million while the broader Reuters Russian Composite ended 7.85 percent higher at 1,421.38.

The Moscow Interbank Currency Exchange, dominated by local investors, saw its index end the day 8.62 percent higher at 1010.48 on trade of 4.7 billion rubles ($157 million).

"At the moment there are a lot of buyers looking at Russia ... today's upturn happened practically without a pause, it was very difficult to cover any open shorts," said Prospekt trader Nikolai Gusyev.

Russian shares seemed set for a correction downward in the first part of the week, but received support from a rise in oil prices after Saudi Oil Minister Ali al-Naimi said oil cartel OPEC could cut production by 1.5 million barrels a day.

Top two oil firms LUKoil and Yukos drew buyers. They ended up 5.25 percent at $12.230 and 7.85 percent at $4.260, respectively. Surgutneftegaz closed 6.37 percent higher at $0.2670.

Market bellwether UES was heavily bought to close up 11.68 percent at $0.1214 while Mosenergo ended 6.86 percent higher at $0.0374. Long-distance telecoms firm Rostelecom added 7.74 percent to $0.7030.

Russian ADRs quoted in London were also strongly higher. Gazprom added 7.02 percent to $9.14, UES rose 9.46 percent to $11.8722 while Surgut was 8.03 percent firmer at $13.5.

Traders were coy on when the current run might falter.

"It is not clear what level people are willing to buy up to," said Alexander Pankov at CentreInvest Securities. "There's a feeling that things have to fall after a good run of a few days," Pankov said.

Aside from the oil price, dealers said investors now had greater confidence in Russia's economy.

"This morning we've seen buyers of ADRs in London and the rest has been going to MICEX, where volumes are now 10 times what they are on the RTS," said Oleg Martynenko, head of domestic trading at Alfa Bank.

"The perception of Russia's future is different since the economic reform process has started to gain confidence."