Russian rouble hits five-month low, Yandex shares rally

MOSCOW: The rouble hit a five-month low against the dollar on Wednesday, losing ground along with other emerging market currencies, while stocks rose, helped by rallying Yandex shares after the internet giant said it was in talks to buy Russian online bank Tinkoff.

The rouble has been weakened by fears of new sanctions against Russia stemming from the crisis in neighbouring Belarus and the poisoning of Kremlin critic Alexei Navalny. Moscow denies any wrongdoing.

At 1521 GMT, the rouble was 0.8pc weaker against the dollar at 76.72 after hitting 77.1150, its lowest level since April 22.

Against the euro, the rouble fell 0.5pc to 89.62.

The rouble is expected to slip to 78 against the dollar, said Iskander Lutsko, chief investment strategist at ITI Capital, mentioning fresh US sanctions and the inauguration of Belarus leader Alexander Lukashenko as negative for the Russian currency.

The US Treasury Department on Wednesday said it imposed sanctions on individuals and entities linked to the leader and financier of the Internet Research Agency (IRA), a "Russian troll farm".

Navalny was discharged on Wednesday from the Berlin hospital where he was treated after suspected poisoning with a Novichok nerve agent, an accusation Moscow denies.

Despite the rouble's decline, the finance ministry saw healthy demand of 173 billion roubles ($2.26 billion) for its OFZ treasury bonds, selling papers worth 120 billion roubles.

Demand for those bonds is regarded as a gauge of investor attitude towards Russian assets.

Brent crude oil, a global benchmark for Russia's main export, was up 1pc at $42.12 a barrel, buttressing stock indexes.

The dollar-denominated RTS index was up 0.7pc at 1,200.9 points.

The rouble-based MOEX Russian index was 1.4pc higher at 2,924 points.

Shares in Yandex, considered a Russian Google, rose more than 15pc at one point after the company said it was in talks with TCS to buy its online bank, Tinkoff.

Yandex shares were up 2pc at 5,002 roubles, while TCS GDRs on the Moscow Exchange fell 2.7pc to 2,107.0 roubles by 1521 GMT.