April 6 (Reuters) – Russian stock indices fell on Wednesday, hit by a fresh round of Western sanctions on Moscow’s actions in Ukraine, while the ruble rebounded in trade to hit a six-week high.

Shares largely lost ground after the United States announced a new round of sanctions targeting Russian financial institutions, as well as Kremlin officials and their family members. Russia calls its actions in Ukraine a “special military operation” and denies targeting civilians. Read more

The new sanctions hit Russia’s Sberbank (SBER.MM), which owns a third of Russia’s total banking assets, and Alfa Bank, the country’s fourth-largest financial institution, US officials said. But energy transactions were exempted from the latest measures, officials said.

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Russia’s rouble-based MOEX index (.IMOEX) ended the day down 1.9% at 2,611.4, moving further away from the all-time high of 4,292.68 hit in October.

Sberbank shares underperformed the market after the new sanctions, falling 8.1% to 141.60 rubles ($1.78) a piece.

Rival second-tier lender VTB (VTBR.MM) lost 4.9% on the day.

Sberbank and Alfa Bank, Russia’s biggest private lender, both said further US sanctions would not significantly impact bank operations. Read more

Downward pressure on stocks stemming from negative sentiment around Western sanctions news may be limited as the government has pledged to support Russian companies by buying their shares with money channeled through the National Wealth Fund.

Russia’s stock market is showing ‘miraculous resilience’ to sanctions and a rapid decline in activity in the domestic manufacturing and service sectors in the absence of foreign investors who are still barred from participating to transactions in Russia, brokerage Finam said in a note.

The dollar-denominated RTS Index (.IRTS) received support from dollar weakness and rose 3% to 1034.79.


The Russian ruble extended its recovery gains on Wednesday, returning to levels seen before Russia sent tens of thousands of troops to Ukraine on February 24 as it moved away from an all-time low of nearly 121 .53 for a dollar and 132.41 for a euro. struck in Moscow trade in March.

The Russian currency also raised fears that Russia is closing in on a potential default on its international debt as it pays dollar bondholders in rubles and said it would continue to do so as long as its reserves exchange would be blocked by sanctions. Read more

The ruble added more than 4% on the day to 79.70 per dollar, after hitting 79.01, a level last seen on February 23. Market turnover in the main session reached $706 million, well below an average of $4-6 billion. billion seen before February 24.

Against the euro, the ruble gained 5% to 87 after hitting 85.5975, its highest level since Feb. 17, artificially supported by capital controls and a ban on spot currency buying.

The ruble is being driven by export-focused companies selling foreign currency and weak importer activity, Promsvyazbank said, adding that it cannot be ruled out that Russian companies are trading at 74-76 against the note. green in the next few days.

The ruble is also expected to retain central bank monetary policy support as inflation accelerated to a seven-year high of 16.7%. Read more

The central bank, which raised its benchmark rate to 20% as an emergency measure in late February, will next meet on rates on April 29.

($1 = 79.7500 rubles)

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Reuters reporting; edited by Kirsten Donovan and Lisa Shumaker

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