MOSCOW: The Russian rouble strengthened at Tuesday's open as oil prices rose, while stock indexes inched down in thin trade as investors sought to minimise risk as the year-end nears.
By 0707 GMT, the rouble added 0.2 percent to 31.08 against the dollar after briefly touching 31.00, its strongest since Dec. 6.
Versus the euro, the rouble was stable at 40.64 and firmed 0.2 percent to 35.38 versus the euro-dollar basket, remaining in the range of 34.70-35.70 where the central bank does not influence the rouble rate by carrying out forex interventions.
The market activity waned before the New Year and a 10-day long holiday in Russia, while market players were seen covering existing positions to minimise risks.
"There is no market as such. If there were no big clients' flows, the basket would just stayed within a range," said a dealer at a major Western bank in Moscow.
Oil prices at around $108 per barrel shielded Russian fundamentals by ensuring fresh inflows of foreign currencies into the export-focused economy .
Market players were also converting dollars and euros to meet local needs as interbank overnight rouble rates stood at 5.6 percent, close to this year's peak of 5.8 percent earlier this month.
The dollar-based RTS index was down 0.2 percent and its rouble-traded peer MICEX gave up 0.3 percent, hovering around Monday's closing level.
"The Russian market has been seriously lagging global indices in December, though this was in line with the general downbeat trend on all EMs (emerging markets). We expect Russia to drift higher for the last few days of the year, but see a flat opening today," analysts at Uralsib Capital said in a note.
Analysts at Sberbank said in a note that the market could form an upside move, driven by profit-taking in short positions, pushing the MICEX index towards resistance at 1,400-1,420 points.
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