Moscow Trade Halted Again As Stocks Soar

Russia's two main stockmarkets bounced back yesterday after trading resumed for the first time since Wednesday - but were then closed after further volatility.

The rouble-denominated MICEX and dollar-denominated RTS reopened from suspension, only for trading to be halted in the morning and afternoon. Regulators sought the closures as shares soared - the MICEX was up 26.3% and the RTS 20%. By early evening, trading had not resumed.

The revival of Russian markets, coinciding with a strong rally on Wall Street and in London, came after the Kremlin pumped nearly $60bn (£33bn) into money markets. Russia's finance ministry said on Wednesday it was lending $44bn to the three main banks, while the central bank announced loans of $14bn to ease the liquidity crisis.

Yesterday the prime minister, Vladimir Putin, said Russia's economy remained secure. Speaking at an investors' forum in the Black Sea resort of Sochi, he said that the "fundamental indicators" were sound and the country had "more than $550bn" in currency reserves. "Our response to problems will be market-orientated. The government and the central bank have sufficient reserves to defend the currency and financial system," Putin said. Other Kremlin officials made clear the government was prepared to intervene further.

Last night, however, analysts warned it was premature to suggest Russia's liquidity problems were over. They said the finance ministry would be forced to intervene next month when banks and major companies settle quarterly tax bills.

"I think it's too populistic for our government to say everything is OK in Russia," Mikhail Zak, head of research at Veles Capital Research in Moscow, told the Guardian. "There is enough money for one or two years to help with internal liquidity, but not longer." Yesterday's gains would likely be short-lived, he said, adding that firms were struggling to attract foreign investment. "Russian banks and companies don't have enough money," he said.

Russia is the worst-performing emerging market this year, falling $680bn from a record high in May. The RTS has lost 36% in September and, on Tuesday, the MICEX fell 17% - its biggest slide since Russia's 1998 financial default.

The Russian economy is now integrated into global markets and has suffered this week as shares have fallen around the world. But the slump in Russia has been particularly acute because of falling oil prices and after foreign investors pulled out $35bn in capital since last month's brief war with Georgia.