Vladimir Putin on Monday backed Dmitry Medvedev, a relatively pro-western liberal, as his favoured candidate to be Russia’s next president, ending months of speculation over who would be his preferred successor.

Video: Putin’s protégé named

Quentin Peel, the FT’s international affairs editor, anaylses the latests moves

Investors hailed the choice of the softly-spoken Putin protégé from St Petersburg – a first deputy prime minister who has also been Kremlin chief of staff and chairs Gazprom, the Russian gas giant – with Moscow’s two main stock market indices closing at record highs.