TOKYO: Russian stocks rebounded in New York as the White House said President Barack Obama called Russian President Vladimir Putin to discuss the Ukraine conflict, fueling speculation that a peace accord will be reached.
The Market Vectors Russia ETF, the biggest U.S. exchange-traded fund that holds Russian shares, jumped 2 percent to a two-month high in New York after slumping as much as 1.9 percent. A Bloomberg index of the most-traded Russian stocks in the U.S. added 0.8 percent, also reversing early losses and extending a four-day rally to 9 percent. The ruble strengthened to a one-week high.
Stocks rallied after the White House said in a statement that Obama underscored “the rising human toll of the fighting” and the importance of Putin “seizing the opportunity presented by the ongoing discussions.” The call was made a day before a gathering in Belarus that European leaders described as a “last-chance” summit. Obama has said the U.S. would consider sending lethal military aid to Ukraine if negotiations fail.
“We will see more flexibility on Russia’s part after the phone call,” Ian Hague, a founding partner at New York-based Firebird Management LLC, which oversees about $1.1 billion, including Russian stocks, said by phone from New York. “Obama has probably explained to Putin that if there is no break in Russian aggression in Ukraine, there will be new sanctions, and that wasn’t an empty threat on Obama’s part.”
