LONDON: Russia's rouble gave up most of its early gains on Thursday after uncompromising comments on Ukraine from President Vladimir Putin, though expectations of more euro zone policy easing boosted most other emerging assets.
The rouble had bounced 1.5 percent after the central bank cut interest rates on one-year foreign currency repo loans to banks and signalled readiness to support the currency.
The rouble gave up those gains, however, to stand just 0.2 percent higher after Putin's annual keynote address repeated his criticism of the West and blamed it for the crisis in Ukraine .
"The rouble had rallied ahead of Putin's speech fearing some strong verbal intervention. But as Putin failed to deliver any positive supportive news, the (currency) is again under heavy attack tumbling (past) 53 per dollar," said Bernd Berg, director for EM strategy at Societe Generale.
He noted that the rouble was helped by the central bank signals and Brent crude's stabilisation above $70 a barrel.
"I think any rebound is just technical reaction... speculative pressure on the rouble will continue until the fundamental picture changes or the central bank comes into the market with more forceful action," Berg added.
Russia's rouble-denominated equities extended recent gains, jumping to 33-month highs. The dollar-denominated index also rose 1 percent, bouncing off five-year lows.
Russian Eurobond spreads meanwhile tightened 11 basis points to 459 bps on, just off five-year highs. Neighbouring Ukraine's spreads tightened 43 bps off 5-1/2 year highs as fright caused by a nuclear accident abated.
On broader emerging markets, a four percent jump in Chinese stocks helped MSCI's emerging equities rally 0.7 percent for their biggest one-day gain in two weeks .
The rand and lira firmed as the dollar eased off five-year highs. Central European markets rose, tracking Western bourses before a European Central Bank meeting that could extend corporate debt purchases and provide signals about the likelihood and timing of full-fledged sovereign bond buying.
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