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The prospect of a Trump-Putin summit lifts Russia stock, the rouble and Ukrainian bonds

The Russian rouble strengthened on Thursday, Moscow stocks rose and Ukrainian bonds rallied after the prospect that a meeting would be held between U.S. president Donald Trump and Russian President Vladimir Putin.

In its best day in more than two weeks, MOEX, the main Russian stock index rose by over 5% and reached a peak of 2,915 - a level that is close to three months old. Gazprom, the gas producer, saw a 3.4% increase and Yandex, the technology company jumped by 3.2%.

The SPB Exchange, a former foreign stock exchange that was subjected to Western sanctions before, has risen 7.5%.

Yuri Ushakov, a Kremlin aide, announced that Putin and Trump would meet soon - the first time since 2021.

In a client note, Alfa Bank analysts stated that investors hope the meeting will lead to a normalization of the geopolitical environment. "The shares of companies which benefit from the easing tensions have grown more strongly. These include Gazprom Aeroflot, and Sovcomflot."

Stocks that are exposed to both countries gained as well. Ferrexpo, a Ukrainian miner, rose around 20%. Raiffeisen International, an Austrian lender, soared over 12%.

The excitement spread to the FX market, as the rouble strengthened to a 2-week high against both the dollar and the Chinese yuan. According to LSEG, based on quotes from over-the counter exchanges, the Russian currency rose 0.7% and reached 79.45 per dollar at 1010 GMT.

On the Moscow Stock Exchange, the rouble gained 0.6% against yuan, the most traded foreign currency in Russia.

The announcement of a potential meeting between the leaders came just a day after U.S. Envoy Steve Witkoff met with Putin in Moscow to try to achieve a breakthrough in the Ukraine War.

Data from Tradeweb showed that international bonds issued by Ukraine rose sharply as well. The 2035 and 2036 maturity gained more than 4 cents per dollar, trading between 52.5-56.7, their highest levels since mid-May.

The GDP-linked warrant increased by 1.35 cents, to 76.4 cents. Reporting by Karin Strohecker, Gleb Bryanski and David Holmes; editing by Duncan Miriri & David Holmes

(source: Reuters)