Russian equities have soared to new highs for the year as the strengthening oil price and hopes of a global recovery established Moscow as the world’s best-performing stock market this year.

The dollar-denominated RTS index closed on Monday at 1,428.06, up 4 per cent on the day and up 126 per cent since January 1.

The rouble-denominated Micex index closed at 1,357.44, up 3.7 per cent on the day and 119 per cent higher since the start of the year.

BGC Partners became the latest western inter-dealer broker to break into the Russian market, announcing plans for a 35-person office in Moscow to trade foreign exchange, repos, bonds and equities.

The move reflects a belief that the Russian market had stabilised in the wake of the financial crisis.

The sharp rise in stocks is partly due to the poor performance of Russian equities at the end of 2008 and start of 2009 as fears over the country’s weakening currency prompted the central bank to intervene and oil dipped to lows close to $30 a barrel.

Since the end of September, the RTS and Micex have each jumped 12 per cent, while the oil price has risen 10 per cent to more than $70 a barrel.

Russia’s equity markets are heavily weighted towards oil stocks, which means they tend to trade in line with oil prices.

The appreciating rouble and stronger external trade numbers have helped sentiment in Russian equities.

The Russian economy is expected to expand 2.5 per cent in 2010 after contracting about 8.2 per cent this year.

Nigel Rendell, senior emerging markets strategist at RBC Capital Markets, said: “Russia’s equity markets are also being helped by the fact that they are a so-called late cycle economy.

“While interest rates in the G10 economies and several emerging market countries have reached bottom, and in some cases [Australia] starting to rise again, Russian interest rates are still being cut.”

Get alerts on Emerging markets when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.

Follow the topics in this article