(Reuters) -The Russian rouble stabilised near 80 to the dollar on Wednesday and stock indexes pared earlier gains and inched lower, losing momentum after weeks of jittery trade.
Russian actions in Ukraine, which Moscow calls “a special military operation”, remained in focus, along with a risk of new Western sanctions and expectations that the economy is heading for its sharpest contraction since 1994.
At 1438 GMT, the rouble eased 0.3% to 79.91 against the dollar, after rallying to 71 last week, which was its strongest since Nov. 11.
Against the euro, the rouble was little changed on the day at 86.29.
“There will be several periods of strong turbulence on the market by the year end,” said Natalia Orlova, chief economist at Alfa Bank, adding that even though the rouble may firm in the coming month, there is substantial room for its weakening in the longer run.
The rouble eased this week after the central bank scrapped a 12% commission for buying foreign currency through brokerages and promised to lift a temporary ban on selling foreign exchange cash to individuals from April 18.
But the rouble retains support from export-focused companies that are obliged to convert 80% of their forex revenues on the domestic market.
On the bond market, yields on 10-year OFZ treasury bonds declined to 10.57% from a record high of 19.74% seen on March 21 after a nearly month-long trading hiatus.
The finance ministry, which has suspended borrowing on domestic and external markets this year, is due to pay coupons on three OFZ series on Wednesday.
Stock market indexes gave up earlier gains, with the rouble-based MOEX Russian index sliding 0.7% to 2,523.1 points. The dollar-denominated RTS index fell 0.8% to 996.3 points.
Shares in Rosbank, a Russian subsidiary of French bank Societe Generale, have again outperformed the market, adding 10% after rising by around 40% a day on Monday and Tuesday.
Rosbank shares rallied after Societe General said it would quit Russia and take a 3 billion euro ($3.25 billion) income hit from selling Rosbank to Interros Capital, a firm linked to Russian oligarch Vladimir Potanin.
($1 = 0.9229 euros)
(Reporting by Reuters, Editing by William Maclean)